The three-month gap between Reserve Bank policy reviews has been a rollercoaster ride for forecasters and markets, and even now there’s a significant degree of uncertainty around which direction the RBNZ might take. We set out our thinking in a note last week, and the flurry of economic data since then hasn’t really shifted the balance. Back in its November Monetary Policy Statement, the RBNZ surprised almost all with the threat of further tightening in 2024 if inflation pressures didn't recede fast enough. Central to their thesis was concern that domestic inflation pressures, including wage growth, were taking ... (full story)