Having raised rates more aggressively than any other developed market central bank, we think the RBNZ’s tightening cycle is now over. The Bank has already succeeded in sending the economy into recession and early indications are that price pressures have come off the boil. That said, the continued strength of the labour market presents upside risks to the inflation outlook, meaning that the RBNZ will cut rates only in Q1 2024 rather than by year-end as we were previously forecasting.
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