VIEW: Goldman Adjust Hike View, See Less Hikes Than RBNZ

Goldman Sachs note that “in light of today's hawkish RBNZ guidance and OCR track, we now expect the RBNZ to tighten by +25bp at every meeting in 2022, taking the OCR to 2.5% by year-end (previous peak at 2.0% in August). The RBNZ has shown its determination to engineer tighter financial conditions over the medium-term in order to dampen inflationary pressures, and we think its perception of medium-term global inflation risks will see it continue to tighten rates over the course of this year. That said, while we think further tightening in 2023 is possible, we do not view it as the most likely scenario should global inflationary pressures ease and house prices decline as we expect.”