VIEW: Westpac: RBNZ To Hold In August; But A Hike Is Still Likely Before Year End.

Westpac continue to see “the RBNZ raising the cash rate to 5.75%, but in November instead of August.”

• “Evidence has accumulated suggesting persistent inflation pressures as feared.”
• “The economy is slowing from a very overheated position but is still growing.”
• “Even so, recent data have likely not been strong enough to overcome the RBNZ’s strong bias to keep the OCR at 5.5%.”
• “We think the theme of economic resilience and sticky inflation will persist and will eventually force the RBNZ to act.”
• “With the current sticky domestic inflation pressures likely to ease only gradually, we see a slow rate reduction cycle beginning in the second half of 2024.”