OCR Preview Survey: Economists predict cut
A total of 62% of economists told TMM they believe the Reserve Bank’s Monetary Policy Committee will slash the central bank rate next week.
It comes after Governor Adrian Orr shifted to an easing bias in March, amid weak growth and inflation numbers. The Monetary Policy Committee, which has a mandate to keep employment numbers sustainable, is also likely to be influenced by soft labour data this week.
Economists were not 100% certain on the OCR cut. They give a cut a probability of between 60%-70%. About 38% of economists think there will be no change at all. Almost all of the economists who responded to TMM believe the bank will signal a slower inflation and interest rate track.
Kiwibank chief economist Jarrod Kerr believes we will see a cut next week, and a second one in August, bringing the OCR to 1.25% by the end of the year. He believes the Reserve Bank will adopt a more downbeat outlook.“The last MPS in February was very even-handed, with upside and downside risks equally weighted. The OCR announcement in March showed a clear shift to the downside. The balance of risks will have to be weighted down in the new set of forecasts and OCR track.”
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
![[Weekly Wrap] KiwiSaver in play; but outcome unclear](https://goodreturns.publit.io/file/c_fill,w_300,h_200/0ad582e4-c9a3-4692-bbe2-62d928f77fd2.jpg)
