Wholesale interest rate markets boiled after the unpleasant inflation shock, with the two-year 'swap' rates for example surging by 19 basis points. A 75-point OCR rise next month is now about 85% priced-into rates while the markets now also pricing a better than 50-50 chance of ANOTHER 75 point rise in February. At current wholesale market pricing, a peak OCR next year of around 5.3% is now being seen. They also now expect a 75 point rise next month. The RBNZ has little control over imported inflation, but can try to rein in domestically generated inflation through hiking the Official Cash Rate.

Source: Stuff October 18, 2022 12:28 UTC