ANZ on the RBNZ cash rate hike cycle ahead, on track for 1.75% by the end of 2022

ANZ comments: MPR clearly signalled that they see the monetary policy cycle as having turned.

ANZ say:

• the labour market is very tight in a cyclical sense (in fact we think it’s close to or at maximum sustainable employment)
• inflation expectations are rapidly increasing
• and measures of core inflation in Q2 were at or above the top of the RBNZ’s target band of 1-3%

Forecasts for the when of hikes:

• we expect that the OCR will be raised in 25 basis point increments at the August 2021, November 2021, the February, May, August, and November 2022 Monetary Policy Statements, bringing the OCR to 1.75%.