The RBNZ came and went and did roughly what we thought they’d do. They’re now out of the game until the end of summer (23 February), so we’ll all have to find something else to write about. In brief: the OCR was lifted the regulation 25bps not 50bps, the Bank said explicitly that it planned to take the OCR up to the tighter side of (2%) neutral, and it duly forecast a further 7½ OCR raises through to the end of 2023, a peak of 2.6%.
This was all pretty close to what we’d expected, so we haven’t altered our interest rate view. We continue to see a lower peak OCR of 2.0% compared to the RBNZ and market.
Markets were a little more surprised, with the RBNZ’s OCR forecasts and explicit ruling out of 50bps moves (“considered steps…were the most appropriate”) a clear reality check for the aggressive pricing that had been factored in.