Earlier preview here:
Westpac are also expecting a 0.5% rate hike:
- We expect the Reserve Bank to raise the Official Cash Rate by another 50 basis points to 2.00% at the May Monetary Policy Statement.
- We also expect the RBNZ to provide a clear signal that there is more tightening to come. The RBNZ has come to the conclusion that stronger action early on will reduce the need for an even more painful peak in interest rates in the future. That prompted them to raise the cash rate by 50bps in April, opening the door for further large increases at future meetings.
- We think that recent developments will leave the peak in the RBNZ’s OCR forecasts close to the 3.4% peak that was projected in February. However, with a faster pace of tightening, that peak will be reached sooner.
The Reserve Bank of New Zealand have been well ahead of other DM banks, beginning lift-off back in October last year.