ANZ expect the first Reserve Bank of New Zealand rate cut in February 2025 (prior May ’25)

Reserve Bank of New Zealand projection from ANZ in New Zealand.

In brief:

• We have tweaked our Official Cash Rate (OCR) forecast and now
  expect the first OCR cut to come in February 2025, rather than
  May.
• domestic
  inflation … we expect that meaningful progress is
  around the corner.
• The real economy is very weak and given the vibe
  of “soft data” (surveys, leading indicators and the like), we are now
  more confident in the weak economic outlook
• Before cutting the OCR, the RBNZ needs to not only be confident that
  CPI inflation is on its way to 2%, but that it can be reasonably
  expected to subsequently stay within the 1-3% target band.
• by February next year, we are anticipating that the RBNZ
  will have seen Q4 CPI inflation at 2.6% y/y (non-tradable still 4.7%
  y/y, but we are forecasting it to drop sub-4% the following quarter),
  and unemployment through 5%. That should do it, in our view.

This article was written by Eamonn Sheridan at www.forexlive.com.