The Reserve Bank of New Zealand’s initiation of rate cuts came earlier than expected, marking a significant U-turn from the bank’s May forecast.

During the pandemic, Antipodean economies enacted stringent measures to control population mobility, which significantly disrupted the economy, especially in the housing and labor sectors. In New Zealand, inward migration later surged and has only recently slowed due to emigration. This, along with other factors, has weakened economic growth and housing demand, resulting in disinflation, which has prompted the Reserve Bank of New Zealand (RBNZ) to cut...

At their recent meetings, the Reserve Bank of Australia and Reserve Bank of New Zealand grappled with conflicting signals.

As monetary policy continues to evolve globally, both the Reserve Bank of Australia and the Reserve Bank of New Zealand recently shifted to align their views closer to those of other leading central banks. Both banks maintained their current interest-rate levels but removed language that referred to the possibility of further monetary policy tightening. Instead, they moved to a more data-dependent mode and laid the groundwork for the easing ...