{"id":381559,"date":"2026-04-16T00:03:08","date_gmt":"2026-04-16T00:03:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/381559\/"},"modified":"2026-04-16T00:03:08","modified_gmt":"2026-04-16T00:03:08","slug":"economist-cameron-bagrie-weighs-in-on-ocr-debate-over-hike-early-or-not-to-hike","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/381559\/","title":{"rendered":"Economist Cameron Bagrie weighs in on OCR debate over hike early or not to hike?"},"content":{"rendered":"

\u201c[Neutral] is where the Reserve Bank\u2019s neither got the foot on the accelerator or the brake.<\/p>\n

\u201cIf you get this supply shock, you probably want to have that OCR around neutral, which is around 3%.\u201d<\/p>\n

Bagrie said the country could start to see seepage from higher fuel prices and transport costs into more generalised inflation.<\/p>\n

\u201cThat\u2019s the sort of story the Reserve Bank needs to stomp over,\u201d he said.<\/p>\n

\u201cI favour a strategy of what\u2019s called a stich in time saves nine. If I was the Reserve Bank, I\u2019d be going a little bit earlier as opposed to going later.<\/p>\n

\u201cThe risk is if they go later, you\u2019ve got to go an awful lot more.\u201d<\/p>\n

Earlier this week, ANZ economists changed their interest rate outlook, forecasting we could now expect three consecutive OCR hikes<\/a> \u2013 in July, September and October.<\/p>\n

That would bring the OCR to 3%.<\/p>\n

ANZ chief economist Sharon Zollner said the Reserve Bank (RBNZ) committee would not want to repeat the mistake of the Covid era, \u201cwhen policy was kept too loose for too long\u201d.<\/p>\n

\u201cEssentially, we see the RBNZ becoming too uncomfortable with an OCR in stimulatory territory as inflation inevitably rises,\u201d she said.<\/p>\n

\u201cThe risks of going too late outweigh the risks of hiking too soon, as long as the OCR is not considered contractionary.\u201d<\/p>\n

But Zollner said all forecasts should be taken with a \u201cgenerous pinch of salt\u201d.<\/p>\n

Kiwibank economists hit back at the forecast<\/a>, calling it \u201ctone deaf\u201d and \u201cpotentially reckless\u201d.<\/p>\n

\u201cBoth businesses and households are struggling with increased costs, not surging demand,\u201d they said.<\/p>\n

The Kiwibank economists warned raising interest rates too soon \u201crisks a repeat of past mistakes, potentially inducing a recession\u201d.<\/p>\n

\u201cThis is not a demand story, this is not Covid.<\/p>\n

\u201cHouseholds and businesses who\u2019ve already seen their costs rise don\u2019t need a rise in interest rates to dampen their demand.\u201d<\/p>\n

Instead, the Kiwibank economists argued the RBNZ\u2019s best course of action is to \u201cwatch, wait and weigh up\u201d the facts once they have the information in front of them.<\/p>\n

They said New Zealand was likely to see a contraction in economic activity in the current quarter, though this won\u2019t be played out in data for months to come.<\/p>\n

\u201c[The second-quarter Consumers Price Index] isn\u2019t out until July, after the RBNZ\u2019s decision, and to know if inflation sticks around, we really need to see Q3 [third-quarter] data at the very least.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"\u201c[Neutral] is where the Reserve Bank\u2019s neither got the foot on the accelerator or the brake. \u201cIf you…\n","protected":false},"author":2,"featured_media":381560,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[4619,104955,1643,138,53314,6150,4101,2245,3806,3914,13488,219,1437,24826,78,1943,10110,111,139,5006,69,10667,6644,90,691,1523,21411,10665,72231,19862,109209,61,25592,1533],"class_list":{"0":"post-381559","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-act","9":"tag-bagrie","10":"tag-bank","11":"tag-business","12":"tag-cameron","13":"tag-conflict","14":"tag-debate","15":"tag-early","16":"tag-east","17":"tag-economist","18":"tag-economists","19":"tag-economy","20":"tag-global","21":"tag-hike","22":"tag-in","23":"tag-inflation","24":"tag-middle","25":"tag-new-zealand","26":"tag-newzealand","27":"tag-not","28":"tag-nz","29":"tag-ocr","30":"tag-odds","31":"tag-on","32":"tag-or","33":"tag-over","34":"tag-pressure","35":"tag-reserve","36":"tag-shocks","37":"tag-supply","38":"tag-threaten","39":"tag-to","40":"tag-weighs","41":"tag-will"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/381559","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=381559"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/381559\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/381560"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=381559"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=381559"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=381559"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}