Financial markets are "becoming attuned" to the risk that the Reserve Bank (RBNZ) may push the Official Cash Rate up by 75 basis points in its November review, ASB economists say. In ASB's Economic Weekly, senior economist Mark Smith says the markets are now pricing in a 5% OCR by mid-2023 and therefore "there is likely more upside to NZ yields". "The RBNZ looks like it means business and we are confident NZ inflation will eventually be brought under control. "Once up, it will prove difficult to push inflation back down. ASB economists still expect a 50 basis point lift to the OCR in November (4% OCR), with a follow-up 25bp hike in February 2023 (4.25%).

Source: Stuff October 17, 2022 03:58 UTC