NZ Central Bank Slashes Rates Again—6th Straight Cut Amid US-China Trade Chaos

Another cut, another desperate bid to stay afloat. The Reserve Bank of New Zealand just dropped rates for the sixth consecutive meeting—blaming ’global headwinds’ (read: US-China trade tantrums).

No surprises here—central banks still think cheaper money fixes everything. Meanwhile, crypto traders shrug and stack sats.

Pro tip: When traditional finance panics, Bitcoin smiles. Just saying.

Economists view US-China trade war as “net negative” to New Zealand

“Despite tariff de-escalation, we continue to view the US-China trade war as a net negative to the New Zealand economy and inflation over the medium term,” said Wesley Tanuvasa, an economist at ASB Bank in Auckland. “Pronounced uncertainty means the RBNZ will want optionality on policy moves, so we’d expect cautious, data- and event-dependent commentary on the outlook for monetary policy.”

Recent indicators have painted a mixed picture. Unemployment held steady at 5.1 percent in the first quarter, defying forecasts of a rise. Commodity prices remain firm, and measures of inflation expectations have edged higher.

Most forecasters, as well as the RBNZ itself, expect headline inflation to pick up toward the top of the central bank’s 1–3 percent target range from its current 2.2 percent pace, before easing back next year.

At the same time, the housing market is subdued, business confidence has slipped, and last week’s tight government budget is projected by the Treasury to leave scope for further rate cuts.

Some economists predict the OCR will fall to 2.5 percent by year-end, while market pricing implies a fair chance of a MOVE to 2.75 percent.

“In this kind of environment, there’s plenty of leeway for strategy to play a role,” said Sharon Zollner, chief New Zealand economist at ANZ Bank in Auckland. “We continue to expect that the RBNZ will ultimately deliver an OCR of 2.5 percent, but we don’t expect them to signal such an outcome at this stage.”

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