Westpac Now See No OCR Hikes In 2024

See below for more details:

"We think it’s likely, absent any further surprises, that the RBNZ will revert to something like their August 2023 view that the OCR will remain at 5.5% until the latter part of 2024. We continue to see them as remaining much more cautious than markets on the prospects for lower rates. While the recent data provides a decent basis for revising down forecasts of inflation this is not the same as being confident those forecasts will be borne out. The RBNZ’s new Remit requires a sole focus on inflation, and we are sure that they will need to be confident they can hit 2% CPI inflation in the second half of 2025 and meet the new Remit. All going well, we can see a path to where they get that confidence by the time of the August 2024 Monetary Policy Statement – but there is a lot of water to go under the bridge before that happens. We think the analysis in our recent note remains relevant."