RBNZ: not done yet
The “Go Big or Go Home” mentality was on display once again in NZ today after the RBNZ delivered an outsized 50bp interest rate cut as it attempts to jolt the stuttering economy back to life. The decision lowers the RBNZ’s official cash rate to 2.5%. This is ~300bps below the peak reached in 2023/24 when the world was fighting the post COVID inflation surge. As our chart shows, outside of the Global Financial Crisis, this is one of the most abrupt policy U-turns in several decades (chart 1). And in our opinion, the RBNZ may not be done yet....