Expect OCR cut in November - economists
Reserve Bank Governor Graeme Wheeler defended the Bank’s stance on interest rates and inflation targeting in a speech to the Otago Chamber of Commerce.
In the speech, he said Reserve Bank decisions involved continually balancing a range of risks, uncertainties, and trade-offs.
But the Bank’s present judgement is that the current interest rate track, which involves an expected 35 basis points of further interest rate cuts, balances a number of economic risks while generating the required CPI inflation increase, he said.
There was only limited reaction to the speech in financial markets, although interest rate markets are pricing in an 85% chance of a 25 basis point cut to the OCR in November.
Wheeler’s speech also reinforced the OCR cut expectations of some bank economists.
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