Latest news with #ChristianHawkesby
Yahoo
a day ago
- Business
- Yahoo
New Zealand's RBNZ Governor Hawkesby On Economic Outlook
Reserve Bank of New Zealand's Governor Christian Hawkesby speaks on Bloomberg TV about New Zealand's economic outlook and the impact of global economic uncertainty. He speaks the same week as the central bank's Monetary Policy Committee lowered the Official Cash Rate by 25 basis points to 3.25%, as expected by most economists.
Bloomberg
3 days ago
- Business
- Bloomberg
RBNZ Governor Hawkesby Says July Rate Cut ‘Is Not a Done Deal'
New Zealand's central bank could hold the Official Cash Rate steady at its next policy decision in July, Governor Christian Hawkesby said. 'The main message we were looking to get to markets was that, when we next meet in July a further cut in the OCR is not a done deal, it's not something that's programmed in,' Hawkesby told Bloomberg Television Thursday in Wellington. 'We're really more in a phase where we are taking considered steps, data dependent. The markets need to follow developments really closely to get a feel for what it means for us.'
Bloomberg
3 days ago
- Business
- Bloomberg
New Zealand's Governor Hawkesby On Economic Outlook
Reserve Bank of New Zealand's Governor Christian Hawkesby speaks on Bloomberg TV about New Zealand's economic outlook and the impact of global economic uncertainty. He speaks the same week as the central bank's Monetary Policy Committee lowered the Official Cash Rate by 25 basis points to 3.25%, as expected by most economists. (Source: Bloomberg)
The Advertiser
3 days ago
- Business
- The Advertiser
Reserve Bank of NZ cuts rates again as inflation falls
New Zealand's central bank has cut rates for a sixth straight meeting, confirming inflation is under control, but amid concerns about the economy. The Reserve Bank of New Zealand (RBNZ) reduced the official cash rate (OCR) by 25 basis points to 3.25 per cent on Wednesday. It has also issued an updated future track, suggesting at least one and perhaps two OCR cuts to come. The tracking downgrades a previous forecast to have the OCR sitting at 2.9 per cent by year's end. Wednesday's cut was not a consensus call, with Governor Christian Hawkesby revealing one committee member dissented, preferring to hold. "Core inflation is declining and there is spare productive capacity in the economy," he said. Spare capacity might be an understatement. New Zealand is enduring a tough run of low growth, or as was the case last year, a deep six-month recession when the economy shrunk by more than two per cent. Mr Hawkesby said the economy was "recovering after a period of contraction" and was currently propped up by high commodity prices. Responding to the environment, as well as shrunken inflation, the RBNZ has cut by 225 basis points in nine months. Some bankers want it to go further, and quickly, to improve business conditions. Kiwibank chief economist Jarrod Kerr said domestic weakness and overseas uncertainty put the case for a bigger rate cut now, before landing at 2.5 per cent soon. "The economy needs stimulus, not restraint," Mr Kerr told Newstalk ZB prior to the decision. "These tariffs, no matter how much they get dialled back ... it's still a tariff across the world, it's still a negative. It still puts deflationary pressure on the economy. "We're saying get it into stimulatory territory and lets kickstart the economy into next year." Arguing for the prudent pathway of the 25 basis point cut, Mr Hawkesby said it was not clear how global heavyweights would respond to the US-led trade war. "For example, it is possible that China could respond to weaker economic activity with a sizeable fiscal stimulus," he said. He said the six-person committee was "literally locked in a room for a week and a half to work it through" and the lack of consensus "reflects the degree of uncertainty that we're dealing with at the moment". Banks, including ANZ and ASB, are still backing the OCR to hit a floor of 2.75 per cent this year. The RBNZ's new forecasts also predict shallow GDP growth of just 1.8 per cent this year, but in better news, an unemployment rate peaking at just 5.2 per cent. The lack of surety from the central bank prompted tepid moves from major lenders. While BNZ cut its floating rate by 25 basis points ahead of the decision, ANZ and Westpac moved after and cut by only 20 and 15 respectively. New Zealand's central bank has cut rates for a sixth straight meeting, confirming inflation is under control, but amid concerns about the economy. The Reserve Bank of New Zealand (RBNZ) reduced the official cash rate (OCR) by 25 basis points to 3.25 per cent on Wednesday. It has also issued an updated future track, suggesting at least one and perhaps two OCR cuts to come. The tracking downgrades a previous forecast to have the OCR sitting at 2.9 per cent by year's end. Wednesday's cut was not a consensus call, with Governor Christian Hawkesby revealing one committee member dissented, preferring to hold. "Core inflation is declining and there is spare productive capacity in the economy," he said. Spare capacity might be an understatement. New Zealand is enduring a tough run of low growth, or as was the case last year, a deep six-month recession when the economy shrunk by more than two per cent. Mr Hawkesby said the economy was "recovering after a period of contraction" and was currently propped up by high commodity prices. Responding to the environment, as well as shrunken inflation, the RBNZ has cut by 225 basis points in nine months. Some bankers want it to go further, and quickly, to improve business conditions. Kiwibank chief economist Jarrod Kerr said domestic weakness and overseas uncertainty put the case for a bigger rate cut now, before landing at 2.5 per cent soon. "The economy needs stimulus, not restraint," Mr Kerr told Newstalk ZB prior to the decision. "These tariffs, no matter how much they get dialled back ... it's still a tariff across the world, it's still a negative. It still puts deflationary pressure on the economy. "We're saying get it into stimulatory territory and lets kickstart the economy into next year." Arguing for the prudent pathway of the 25 basis point cut, Mr Hawkesby said it was not clear how global heavyweights would respond to the US-led trade war. "For example, it is possible that China could respond to weaker economic activity with a sizeable fiscal stimulus," he said. He said the six-person committee was "literally locked in a room for a week and a half to work it through" and the lack of consensus "reflects the degree of uncertainty that we're dealing with at the moment". Banks, including ANZ and ASB, are still backing the OCR to hit a floor of 2.75 per cent this year. The RBNZ's new forecasts also predict shallow GDP growth of just 1.8 per cent this year, but in better news, an unemployment rate peaking at just 5.2 per cent. The lack of surety from the central bank prompted tepid moves from major lenders. While BNZ cut its floating rate by 25 basis points ahead of the decision, ANZ and Westpac moved after and cut by only 20 and 15 respectively. New Zealand's central bank has cut rates for a sixth straight meeting, confirming inflation is under control, but amid concerns about the economy. The Reserve Bank of New Zealand (RBNZ) reduced the official cash rate (OCR) by 25 basis points to 3.25 per cent on Wednesday. It has also issued an updated future track, suggesting at least one and perhaps two OCR cuts to come. The tracking downgrades a previous forecast to have the OCR sitting at 2.9 per cent by year's end. Wednesday's cut was not a consensus call, with Governor Christian Hawkesby revealing one committee member dissented, preferring to hold. "Core inflation is declining and there is spare productive capacity in the economy," he said. Spare capacity might be an understatement. New Zealand is enduring a tough run of low growth, or as was the case last year, a deep six-month recession when the economy shrunk by more than two per cent. Mr Hawkesby said the economy was "recovering after a period of contraction" and was currently propped up by high commodity prices. Responding to the environment, as well as shrunken inflation, the RBNZ has cut by 225 basis points in nine months. Some bankers want it to go further, and quickly, to improve business conditions. Kiwibank chief economist Jarrod Kerr said domestic weakness and overseas uncertainty put the case for a bigger rate cut now, before landing at 2.5 per cent soon. "The economy needs stimulus, not restraint," Mr Kerr told Newstalk ZB prior to the decision. "These tariffs, no matter how much they get dialled back ... it's still a tariff across the world, it's still a negative. It still puts deflationary pressure on the economy. "We're saying get it into stimulatory territory and lets kickstart the economy into next year." Arguing for the prudent pathway of the 25 basis point cut, Mr Hawkesby said it was not clear how global heavyweights would respond to the US-led trade war. "For example, it is possible that China could respond to weaker economic activity with a sizeable fiscal stimulus," he said. He said the six-person committee was "literally locked in a room for a week and a half to work it through" and the lack of consensus "reflects the degree of uncertainty that we're dealing with at the moment". Banks, including ANZ and ASB, are still backing the OCR to hit a floor of 2.75 per cent this year. The RBNZ's new forecasts also predict shallow GDP growth of just 1.8 per cent this year, but in better news, an unemployment rate peaking at just 5.2 per cent. The lack of surety from the central bank prompted tepid moves from major lenders. While BNZ cut its floating rate by 25 basis points ahead of the decision, ANZ and Westpac moved after and cut by only 20 and 15 respectively. New Zealand's central bank has cut rates for a sixth straight meeting, confirming inflation is under control, but amid concerns about the economy. The Reserve Bank of New Zealand (RBNZ) reduced the official cash rate (OCR) by 25 basis points to 3.25 per cent on Wednesday. It has also issued an updated future track, suggesting at least one and perhaps two OCR cuts to come. The tracking downgrades a previous forecast to have the OCR sitting at 2.9 per cent by year's end. Wednesday's cut was not a consensus call, with Governor Christian Hawkesby revealing one committee member dissented, preferring to hold. "Core inflation is declining and there is spare productive capacity in the economy," he said. Spare capacity might be an understatement. New Zealand is enduring a tough run of low growth, or as was the case last year, a deep six-month recession when the economy shrunk by more than two per cent. Mr Hawkesby said the economy was "recovering after a period of contraction" and was currently propped up by high commodity prices. Responding to the environment, as well as shrunken inflation, the RBNZ has cut by 225 basis points in nine months. Some bankers want it to go further, and quickly, to improve business conditions. Kiwibank chief economist Jarrod Kerr said domestic weakness and overseas uncertainty put the case for a bigger rate cut now, before landing at 2.5 per cent soon. "The economy needs stimulus, not restraint," Mr Kerr told Newstalk ZB prior to the decision. "These tariffs, no matter how much they get dialled back ... it's still a tariff across the world, it's still a negative. It still puts deflationary pressure on the economy. "We're saying get it into stimulatory territory and lets kickstart the economy into next year." Arguing for the prudent pathway of the 25 basis point cut, Mr Hawkesby said it was not clear how global heavyweights would respond to the US-led trade war. "For example, it is possible that China could respond to weaker economic activity with a sizeable fiscal stimulus," he said. He said the six-person committee was "literally locked in a room for a week and a half to work it through" and the lack of consensus "reflects the degree of uncertainty that we're dealing with at the moment". Banks, including ANZ and ASB, are still backing the OCR to hit a floor of 2.75 per cent this year. The RBNZ's new forecasts also predict shallow GDP growth of just 1.8 per cent this year, but in better news, an unemployment rate peaking at just 5.2 per cent. The lack of surety from the central bank prompted tepid moves from major lenders. While BNZ cut its floating rate by 25 basis points ahead of the decision, ANZ and Westpac moved after and cut by only 20 and 15 respectively.
Scoop
4 days ago
- Business
- Scoop
The RBNZ Has Seen Enough To Cut More, But Not Enough To Do Enough
Another RBNZ meeting, another rate cut, and another forecast cut. Today's 25bps move to 3.25% is the sixth straight cut, and takes total easing to 225bps. And there's more coming. Although the path is highly uncertain. Policy is much closer to neutral now, but it is still not stimulatory. The RBNZ has lowered the forecast OCR track 25bps, from 3.1% to 2.85%, implying a good chance of another two rate cuts to 2.75%. It's another step in the right direction… and we continue to call for a move to 2.5%. The RBNZ has seen enough to cut again, and again, but not enough to do enough, in our view. We expect to see the OCR tracked lowered again in August towards 2.5%. The weakness in the economy is clear and demands more attention and less restriction. With all the risks offshore, think Trumpian tariffs, and the pain still felt onshore, there's a good argument to be made for taking policy into stimulatory territory. The RBNZ cut 25bps today. The cash rate sits at 3.25%. Were we surprised? Nope. Did we want more? Yes. There's no doubt that the Kiwi economy needs support. The risks to the growth outlook are tilted to the downside. As was revealed last week, the Govt's hands are tied (self-inflicted). So, we look to the RBNZ. In the current environment, with a future clouded by the tariff trade war, there's more for the central bank to do to support the recovery. Rightly so, the RBNZ is signalling more rate cuts. That's the key takeaway from the May MPS. The OCR track was lowered from a flat lined bottom of 3.10% to a 2.85% bottom in March 2026. So now another 25bps cut to 3% is fully baked into the cake. And from there, there's a 60% chance of another 25bps cut to 2.75%. Once again, we would love to have seen a bit more. We're still of the view that a 2.5% cash rate is what the Kiwi economy needs. And an OCR track bottoming anywhere below 2.75% would have signalled what we had hoped to see. But with each MPS, the terminal OCR has moved closer to our 2.5% view. Give them time, and they just might get there. But for now, such heightened uncertainty is making it harder for all policymakers to navigate. So, it's not surprising to see the committee err on the side of caution. The fact the RBNZ 'voted' 5-1, with one member voting for a pause to assess, throws some doubt on the timing of the next move, but not the direction. They are not on a 'pre-set course', and always data dependent. We think there's enough for them to cut again in July, but they may wait until August to cut again. It depends… on what? Everything. That seed of doubt caused a bit of a jolt in financial markets, especially short end interest rates. The pivotal 2-year swap rate rose 10bps, from 3.16% to 3.26%. It's not a big move… but it was one Governor Christian Hawkesby pushed back on. The telling comment from Hawkesby, when asked about the market reaction, was his reference to the new OCR track matching market pricing prior to the announcement. The RBNZ's OCR track matched market pricing of 2.85%. So they would not have expected much reaction at all. Again, we want to reinforce the key message of today's meeting is that the RBNZ is signalling more cuts.
