ANZ goes out on a limb and predicts three OCR rises this year

Essentially, it sees the RBNZ becoming too uncomfortable with an OCR in stimulatory territory as inflation inevitably rises.

In a research note, the bank says the risks of going too late outweigh the risks of hiking too soon as long as the OCR is not considered contractionary (i.e. not over 3%, the midpoint of the RBNZ’s range of estimates of the neutral rate).

However, even with the OCR still “low” the ANZ says is no longer forecasting the OCR will need to increase to 3.5%. It is predicting it will flat-line it at 3% as the negative income and confidence shock (including the hikes) take the heat out of the medium-term inflation.

“It’s possible the subsequent OCR move could be a cut, or that the OCR doesn’t even make it as far as 3%,” the note says.