The RBNZ MPC lowered the OCR by 25bps today to 3.25% as widely expected, taking cumulative policy easing to 225bps.
But the market reaction clearly suggests that a more dovish outlook was anticipated.
What spooked markets was that a vote was undertaken by Committee members, with 1 member voting to hold the OCR and 5 members voting to ease by 25bps.
Acting Governor Hawkesby noted in the press conference that this reflected that there was not absolute consensus about the timing of policy easing but there was consensus about the updated forecasts, including the OCR track which was lowered relative to that presented in February.
The central projection for the OCR now has it bottoming at an average of 2.85% in Q1 2026 which is 25bps lower than assumed in February.
