OCR Update

Gerald Mullaney

20 March 2025

The economy is still in creative destruction mode, including the destruction of the Governer of The Reserve Bank NZ job.

This all indicates, that the pressure is on. It is the view, as of today that, there will be a further 50 basis point cut on the 9 April 2025.

Most are indicating 0.25 basis point cut but that is totally boring and we need to get to the terminal rate sooner rather than later.

This will bring the OCR rate to 3.25% there is still a long way to go to hit the terminal rate of 2.00 to 3.00% the view is, by mid 2025 we could possibly see the low being reached.

Some points of view are, that the terminal rate may arrive at 2.50%

However with the economy still in the destruction phase the view is that the bank may over correct down to 2.00% meaning a low of 3.99% retail mortgage rate is possible or lower depending on the markets, economy and war.

There is 19 days to go until the 9 April 2025 decesion and all decesion and all views are live, nothing can be ruled in or out.

The thing we can be certain of, is that a low is coming.

Stay viligent and alert as ones economic future will depend on it.

There is no such thing as fix and forget.

Snooze you lose.