Tactical guessing game
Until recently, it seemed there was near consensus among economists that the Reserve Bank was likely to cut the OCR again in its next announcement on June 9.
But, as mortgagerates.co.nz has reported, it seems that consensus may be changing, as a range of different factors impact on the situation.
ANZ’s base case remains that further Reserve Bank easing is likely, but there is little immediate urgency to cut.
The bank’s chief economist Cameron Bagrie said the market is increasingly coming around to the same view.
“Pricing for a June cut has fallen from around 80% two weeks ago to around 25% now, while a rate cut is now only 56% priced by August, which is consistent with our view of the risk profile. We put the odds of a move in August at 60%.”
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