Reserve Bank of New Zealand Governor Christian Hawkesby said further interest-rate cuts now face a “high hurdle,” signalling that the easing cycle is effectively finished.
Bloomberg report on Hawkesby speaking an interview today after yesterday's rate cut:
He said the bank’s latest projections, which leave the Official Cash Rate flat through next year with only a small implied chance of another cut, show that it would take a meaningful deterioration in the outlook to justify additional easing.
Hawkesby noted the RBNZ has already delivered 325 basis points of cuts since last August and that continuing to “keep the door open” risks preventing inflation from returning to the 2% midpoint. With inflation at 3% but expected to slow toward 2% by mid-2026, he said the current stance buys the bank time to “observe and absorb” incoming data. Hawkesby also described the market reaction, a stronger NZD and higher yields, as in line with expectations.
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Nothing new from Hawkesby here but a useful recap.
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NZD has continued to rise since the rate cut yesterday.
