Bottom of OCR cuts either here or not far away - ASB

ASB economists say the extent of further interest rate falls is now up in the air and the OCR could bottom out at 3%.

The bank has changed its tune on predicting a drop to 2.75% for the OCR, saying inflation is creeping up, and the RBNZ is getting a bit twitchier about how that spike will affect Kiwis’ perceptions of future inflation.

ASB chief economist Nick Tuffley says the bank now expects one further 25bp cut in August to 3%.

“However, given the uncertainties the risks range from no more cuts to a couple more. We could be around the lows in interest rates now – if not very soon.”