RBNZ Tracker
Dovish
The RBNZ MPC lowered the OCR by 25bps today to 3.00% as widely expected, taking cumulative policy easing to 250bps.
The MPC turned very dovish, lowering the OCR track meaningfully since May alongside updated forecast profiles for a higher unemployment rate and wider output gap.
Two MPC members voted for a 50bp cut and four for a 25bp easing. The Committee also discussed holding the OCR at 3.25%, but didn’t vote on that option. Acting Governor Hawkesby noted that most of the ‘disagreement’ among Committee members was on the balance of risks around the baseline outlook.
The central projection for the OCR now bottoms at an average of 2.55% in Q1 2026, which is 30bps lower than assumed in May.
Our preview highlighted that “given the starting point for the unemployment rate and output gap, there is a relatively strong argument for the OCR track to be a little lower” than just being downgraded to meet market pricing. To be fair, however, the downward revision to the OCR track was larger than we had anticipated.
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