VIEW: ANZ: All Guns Blazing

ANZ note that “as was almost universally expected, the RBNZ lifted the Official Cash Rate (OCR) 50bp to 2.0% today. The tone of the Statement was hawkish, while acknowledging both domestic and global downside risks to growth. The RBNZ’s updated OCR forecast reaches a peak of 3.95% in the second half of 2023, and then declines towards the end of the forecasts, being back at 3.51% in June 2025. This peak was higher than expected. The track is also consistent with more 50bp hikes to come. In our view, domestic growth momentum is cooling rapidly, and this is likely to be more evident by July. However, the RBNZ doesn’t think it’s done with 50s yet, and was happy to signal that clearly today. Accordingly, we have changed our OCR forecast to include one more 50bp hike in July before the RBNZ reverts to a more normal pace of hiking. We maintain our OCR peak forecast of 3.5%.”