Reserve Bank governor Adrian Orr appeared indicate on Tuesday that he believed the assumption that [an OCR increase on Aug 18] was a done deal might be premature.

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www.stuff.co.nz/business/125956034/anz-and-bnz-tip-ocr-to-hit-1-by-yearend-after-record-drop-in-unemployment

The Reserve Bank would be well aware it might have to turn around and cut the OCR again next year, Zollner said. “There’s a lot of things that could go wrong with the Covid Delta variant for example. That is a pretty clear and present danger; one that you can’t forecast or predict.”

Jarden analyst John Carran, who had previously been somewhat sceptical the Reserve Bank would raise the OCR this month, said the employment data had altered his view and he now believed a hike was on the cards. But he nevertheless believed expectations of interest rate rises could be getting a bit ahead of themselves given the uncertainties – especially given Australian Reserve Bank governor Philip Lowe had continued to signal on Tuesday that it did not expect to lift rates until 2024. “There is no doubt that raising the OCR is the right thing to do, but it is just about how far and fast they go,” he said. “I think they will perhaps not slam the brakes on too quickly.”

 

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