Latest piece from ANZ on the RBNZ, expecting the Bank to raise the cash rate by 25bps to 0.5%.

  • RBNZ meeting is on October 6, its next Monetary Policy Review.


  • This is a relatively high conviction view - we view both a 50bp hike or an on-hold decision as unlikely, barring unexpected dramatic developments.
  • Risks around our overall rate track are skewed in the direction of the RBNZ not delivering a full suite of hikes before trouble strikes. However, with global inflation pressures intense, risks are certainly not one-sided.
  • The RBNZ set the bar high for the COVID outbreak to derail hikes, saying it would need to be clear it was a net demand shock, which in turn required a sustained drop in business sentiment. So what's happened? Business sentiment has not only not stayed down - it barely fell at all!

Bolding mine. There is plenty more in the note, the above just a brief summary.

Reserve Bank of New Zealand Governor Orr

Reserve Bank of New Zealand Governor Orr