Will mortgage rates fall much further?
BNZ economists became the latest to tip an OCR cut this month, as central banks around the world took action against the Coronavirus/Covid-19 outbreak. Both the US Federal Reserve and Reserve Bank of Australia slashed interest rates this week.
BNZ head of research Stephen Toplis said the RBNZ was likely to follow the US and Australia.
"Given market pricing, and frenzied responses elsewhere in relation to Covid-19, it is going to be very difficult for the RBNZ to sit on its hands. So, we are formally shifting to the view of the Reserve Bank cutting its cash rate 25 basis points, to 0.75%, at its scheduled March 25 meeting, with the possibility of a further cut in May."
Kiwibank economists, who had forecast cuts of 25 basis points this year, changed their prediction to 50 basis points this week.
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