The Reserve Bank’s Next Move: What Will Mark Lister Decide?

Quick Summary

New Zealand Set to Hike Rates Again: RBNZ Expected to Continue Aggressive Tightening Cycle. This Wednesday, the Reserve Bank of New Zealand (RBNZ) will announce its first interest rate decision of the year. Last November, it increased the Official Cash Rate (OCR) by a super-sized 0.75 per cent -– the highest in history -– taking it to 4.25 per cent, the highest since January 2009 and part of an aggressive tightening cycle not seen before. This week’s decision is expected to take it even higher, with another OCR hike all but assured. The Monetary Policy Statement (MPS), which accompanies policy decisions four times a year and sheds light on where inflation, interest rates and the economy are going from here will also be closely watched this week. Mark Lister, Head of Private Wealth Research at Craigs Investment Partners has said “interest rates should remain relatively low for some time” so this week’s announcement may give clues as to when we can expect them to rise again in New Zealand.

Full Story – Mark Lister: What will the Reserve Bank do next week?

Another Official Cash Rate hike is all but assured.

This coming Wednesday will be a big day for financial markets, with the Reserve Bank of New Zealand (RBNZ) set to announce its first interest rate decision of the year.

We last heard from the RBNZ in November, when it increased the Official Cash Rate (OCR) by a super-sized 0.75 per cent, the highest in history.

That took the OCR to 4.25 per cent, the highest since January 2009. It also meant the Bank had increased its policy rate by a whopping 4.00 per cent in just 14 months, which is the most aggressive tightening cycle we’ve ever seen.

They’ll continue on that path this week, with another OCR hike all but assured.

It probably won’t be as big as last time, with the RBNZ expected to return to the half a per cent moves which prevailed for most of 2022.

That would take it to 4.75 per cent, nowhere near the pre-GFC high of 8.25 per cent many will recall from 2008, but much higher than anything the current generation of borrowers have experienced.

More importantly, we’ll be very interested in the RBNZ’s updated economic and financial projections.

There are seven OCR decisions a year, but on four of these occasions we also get a Monetary Policy Statement (MPS).

These always give great insights into where the RBNZ expects inflation, interest rates and the economy will go from here.

Back in November, the new projections got as much attention as the jumbo rate hike.

Mark Lister is the…

Click here to continue reading…