OCR call change was by ANZ<\/a>, which has forecast three rate hikes this year, starting from July.<\/p>\nIn a note, Kiwibank economists Jarrod Kerr and Alexandra Turcu said the RBNZ’s best option was to watch and wait before deciding its move.<\/p>\n
“Households and businesses who’ve already seen their costs rise don’t need a rise in interest rates to dampen their demand – because this is not a demand story, this is not Covid,” they said.<\/p>\n
“Raising interest rates risks a repeat of past mistakes, potentially inducing a recession. It could be reckless.”<\/p>\n
ASB and Westpac NZ also believed rate hikes could occur from September, although it could happen earlier.<\/p>\n
“I am open to the idea that it could occur as early as May depending on how things evolve,” Westpac chief economist Kelly Eckhold said.<\/p>\n
Kiwibank said there was uncertainty around the duration of the Middle East conflict, and it was causing households and businesses to bunker down.<\/p>\n
“Confidence has been hit, and so to have investment intentions and hiring,” Kerr and Turcu said.<\/p>\n
“Raising interest rates is tone deaf, and potentially reckless. Because both businesses and households are struggling with increased costs, not surging demand.”<\/p>\n
Kiwibank expected to see a contraction in economy activity in the current quarter, although noted the data was still months away.<\/p>\n
“Q2 CPI (inflation) isn’t out until July, after the RBNZ’s decision, and to know if inflation sticks around we really need to see Q3 data at the very least,” they said.<\/p>\n
“In our view, the RBNZ’s best course of action is to watch, wait, and weigh up the facts once they have the information in front of them.”<\/p>\n
Sign up for Ng\u0101 Pitopito K\u014drero<\/a>, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.<\/p>\n","protected":false},"excerpt":{"rendered":"Photo: RNZ Kiwibank says rate hikes would be “reckless” ANZ forecasts three rate hikes this year The RBNZ…\n","protected":false},"author":2,"featured_media":82927,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[48,138,47,219,111,43,139,69,49,46,44,45],"class_list":{"0":"post-378564","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-audio","9":"tag-business","10":"tag-current-affairs","11":"tag-economy","12":"tag-new-zealand","13":"tag-news","14":"tag-newzealand","15":"tag-nz","16":"tag-podcasts","17":"tag-public-radio","18":"tag-radio-new-zealand","19":"tag-rnz"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/378564","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=378564"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/378564\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/82927"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=378564"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=378564"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=378564"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}