RBNZ Orr says it will be a shallow recession

The RBNZ rate hike today (and hawkish statement):

• RBNZ raise cash interest rate target by +75bp to 4.25%, as widely expected
• NZD/USD higher after the Reserve Bank of New Zealand raises its cash rate target by 75 bp

• Headlines greeting the RBNZ rate hike: "New Zealand delivers its biggest rate hike ever"

• Responses to the RBNZ +75bp rate hike - ASB forecast cash rate at 5.5% by April 2023

RBNZ Governor Orr press conference now:

• it will be a shallow recession
• economic activity currently strong
• spending currently strong
• inflation expectations must come down
• wage expectations must also decline

Other officials are speaking also:

• the neutral interest rate has increased
• monetary conditions are not as contractionary
• more time was spent discussing +75 or +100 than was spent discussing +50
• we are talking about 2 or 3 quarters of shallow recession