RBNZ Governor Christian Hawkesby said today the central bank still projects the Official Cash Rate to fall to around 2.50% by year-end, down from current 3.00%. Though, the pace could be “faster or slower” depending on incoming data. He emphasized that the path of policy easing will hinge on the “speed of New Zealand’s economic recovery”.
Hawkesby noted the August Monetary Policy Statement highlighted the sharp blow to household and business confidence, with the economy stalling mid-year and creating more slack. He attributed much of the “confidence shock” to uncertainty over U.S. tariff policies, compounded by cost-of-living pressures and a weak housing market.
Still, leading indicators for July were “better” and aligned with the RBNZ’s outlook for a rebound in the second half of the year. Hawkesby said policymakers will keep monitoring spillovers from U.S. tariffs on both global growth and New Zealand firms. The RBNZ resumed rate cuts last month after a July pause.
