VIEW: ANZ Now Look For The First OCR Hike To Come In Aug '22

ANZ note that they "are now forecasting the RBNZ to begin raising the OCR in August 2022, with gradual but steady increases thereafter taking the OCR to 1.25% by the end of 2023. In the May Monetary Policy Statement, the RBNZ will again revise up its forecasts for GDP, employment and inflation. However, consistent with its "least regrets" approach we expect the RBNZ will continue to signal that removal of policy stimulus remains a long way off. We expect the forecast OCR track (assuming it's published) to suggest perhaps the second half of 2023 for OCR lift-off."

• "The RBNZ already massively reduced their estimate of the negative output gap (ie the degree of spare capacity in the economy) in February compared to what they thought in November. Certainly, when we travel around the country talking to businesses, this feels like an economy that is currently trying to grow faster than it can; i.e. an economy that has a positive - inflationary - output gap. That represents medium-term inflation pressure that is harder for the RBNZ to look through than are simple short-term cost pressures."