RBNZ stays on hold as economists, markets debate timing of first OCR cut

Earlier this week, financial markets had been pricing in the first official cash rate (OCR) cut as early as May next year but by Friday morning they'd pared that out to August with nearly 60 basis points of cuts priced in by the end of 2024, down from 75 points a couple of days earlier.

That's still a bit premature in most economists' eyes. ANZ chief economist Sharon Zollner, for example, thinks the first cut won't be until February 2025.

“Cuts remain a distant prospect, in our view; indeed, we've pushed out our estimate of when they will occur by one quarter,” Zollner says in her preview.

Kiwibank's economists did have a May 2024 cut penciled in, but now say “May is looking too optimistic at this stage. The RBNZ will want more data under its belt, specifically inflation prints, before changing direction.”