{"id":28402,"date":"2024-06-07T10:54:48","date_gmt":"2024-06-07T10:54:48","guid":{"rendered":"https:\/\/www.xtrememarkets.com\/?p=28402"},"modified":"2024-06-07T10:54:48","modified_gmt":"2024-06-07T10:54:48","slug":"anz-economists-predict-earlier-ocr-cut-amid-meaningful-progress-in-inflation-battle","status":"publish","type":"post","link":"https:\/\/www.xtrememarkets.com\/ID\/anz-economists-predict-earlier-ocr-cut-amid-meaningful-progress-in-inflation-battle\/","title":{"rendered":"ANZ Economists Predict Earlier OCR Cut Amid &#8216;Meaningful Progress&#8217; in Inflation Battle"},"content":{"rendered":"<h1><strong>ANZ Economists Predict Earlier OCR Cut Amid &#8216;Meaningful Progress&#8217; in Inflation Battle<\/strong><\/h1>\n<p><span style=\"font-weight: 400;\">Economists at ANZ New Zealand, the country&#8217;s largest bank, have revised their forecast for the first Reserve Bank Official Cash Rate (OCR) cut, moving it up to February 2025 from the previously anticipated May 2025.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Currently, the OCR stands at 5.50%, unchanged since May 2023. This adjustment in ANZ&#8217;s forecast comes as they observe potential progress in controlling inflation, despite ongoing domestic economic weakness. ANZ\u2019s Chief Economist Sharon Zollner highlighted that recent data and leading indicators support a more confident outlook for a weak economy, prompting the bank to adjust its forecast.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Earlier this year, ANZ had forecasted a steady sequence of OCR cuts starting in August, eventually reducing the rate to 3.5% over 12 months. However, by February, they revised their stance, predicting two 25 basis point increases instead, one in February and another in April. Post the February monetary policy review, ANZ acknowledged their forecast error but still saw a strong chance of the OCR moving up before eventually forecasting a cut in mid-2025, later specified as May.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Zollner explained that before cutting the OCR, the Reserve Bank needs to be confident that Consumer Price Index (CPI) inflation is moving toward 2% and is expected to remain within the 1% to 3% target range. By February 2025, ANZ anticipates seeing fourth-quarter CPI inflation at 2.6% year-on-year and non-tradable inflation dropping below 4% in the following quarter, with unemployment rising above 5%. These conditions, according to Zollner, would justify an OCR cut.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The March CPI was 4%, with unemployment at 4.3%. Non-tradable inflation, which includes domestic goods and services, was at 5.8%, while tradeable inflation, including imported goods, was at 1.6%.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">ANZ economists note the housing market remains stagnant, with ANZ holding $107.5 billion in housing loans as of March 31. Looking beyond February, they have penciled in a 25 basis point cut at each Reserve Bank monetary policy meeting, aiming for the OCR to stabilize around 3.5%, considered a neutral rate that neither stimulates nor constrains the economy.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Reserve Bank itself isn\u2019t forecasting an OCR cut until August next year, while financial markets have priced in a cut for November this year. The next OCR review is scheduled for July 10. Meanwhile, Infometrics&#8217; chief forecaster Gareth Kiernan has also adjusted his forecast, now expecting the first OCR cut in February next year instead of November this year.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>ANZ Economists Predict Earlier OCR Cut Amid &#8216;Meaningful Progress&#8217; in Inflation Battle Economists at ANZ New Zealand, the country&#8217;s largest bank, have revised their forecast for the first Reserve Bank Official Cash Rate (OCR) cut, moving it up to February 2025 from the previously anticipated May 2025. Currently, the OCR stands at 5.50%, unchanged since<\/p>\n... <a href=\"https:\/\/www.xtrememarkets.com\/ID\/anz-economists-predict-earlier-ocr-cut-amid-meaningful-progress-in-inflation-battle\/\">continue reading<\/a>.","protected":false},"author":1,"featured_media":28403,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[17],"tags":[2599,168,165,29,35,2601,157,506,2313],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v16.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\r\n<title>ANZ Economists Predict Earlier OCR Cut Amid &#039;Meaningful Progress<\/title>\r\n<meta name=\"description\" content=\"Economists at ANZ New Zealand, the country&#039;s largest bank, have revised their forecast for the first Reserve Bank Official Cash Rate\" \/>\r\n<link rel=\"canonical\" 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