More banks call for OCR cuts
ANZ chief economist Cameron Bagrie expects the RBNZ to cut the OCR by 25bps in June and to then follow it up with another cut in July.
Bagrie’s prediction came after ANZ’s monthly inflation gauge showed falls in the housing, miscellaneous goods, and recreation and culture groups which contributed to a 0.2% fall in the gauge.
They had seen enough across their four prongs (high NZD, dairy income squeeze, inevitability of a prudential response towards housing and continued low core inflation reads) to call the OCR lower, he said.
“Demand across the economy is still solid yet the reality is that inflation has failed to show up at the growth party. Core inflation has now been below the 2% target for 21 successive quarters. That’s enough in itself to justify OCR cuts.”
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