OCR preview - RBNZ has more cuts and work to do

Consensus among the country’s main banks is the OCR will be cut to 3.75% on Wednesday but after that all eyes will be on the RBNZ’s Monetary Policy Statement outlining its forecast.

ASB senior economist Chris Tennant-Brown says the RBNZ is more than half-way through its easing cycle and fixed home loan interest rates are now up to 2% below the peaks seen in 2022/2023.

However, he says ASB’s long-term view is significant falls for the longest-term fixed rates are unlikely, and upward pressure is developing from both events here and abroad.

He says first up: interest rate markets are volatile and can change quickly. Volatility in interest rates can flow through into mortgage interest rates. “It’s not a one-way street to lower mortgage rates.”