MNI RBNZ Review-Sept 2026: Timing Of Future Hikes Uncertain

Hidden PDF

EXECUTIVE SUMMARY: 

• The RBNZ hiked rates 25bp to 2.75% to bring inflation back to the 1-3% target band by “gradually removing stimulus”. Being “gradual” was the major theme. 
• Governor Breman emphasised that the MPC is not on a “pre-set course” and it is important to take time to monitor the impact of the higher OCR as well as new data and information.
• While further tightening is “likely”, the timing is very uncertain though. As a result, a pause on 28 October now looks likely with a hike in December. There is another 25bp assumed in the RBNZ's revised OCR path.
• After fully pricing in yesterday’s 25bp hike, the OIS curve has 38bps of cumulative tightening priced by February 2027 and 67bps by June.