VIEW: Westpac Tweak RBNZ Call

Westpac "now expect the Reserve Bank to raise the Official Cash Rate to a peak of 3% by mid-2023."

• "This would see the cash rate going above 'neutral' and into 'tight' territory for a period of time, before easing back again."
• "It looks increasingly unlikely that a smooth glide path towards a neutral cash rate of 2% would be enough to rein in inflation pressures."
• "The starting point for the economy is wildly stronger than the RBNZ expected, and the upside risks for inflation are growing."
• "Today's labour market surveys for the September quarter demonstrate that hot demand, rather than supply constraints, is the biggest challenge to the inflation outlook."
• "The unemployment rate fell to a record-equalling low of 3.4%, and employment has grown by more than 4% in the last year."
• "Wage growth has picked up, although it undershot our forecasts for the quarter. We expect it to accelerate in the coming quarters, in the face of both a tight labour market and rising inflation expectations."