ING expects the RBNZ to raise the official cash rate (OCR) 25bps to 2.75% on
Sept. 2. At July’s hike the RBNZ said it may still need to withdraw further
monetary stimulus. In its May forecasts—based on higher oil assumptions—the bank
signaled rates could reach 3.0% by year-end and remain around that level
through 2027. Current market pricing tracks the RBNZ’s 2026 outlook but is more
hawkish for 2027 despite softer energy prices. A September hike is fully priced
and markets expect one more move before year-end; OIS curves imply about 50bps
more tightening, taking rates to ~3.50% by mid-2027. ING sees dovish risk ahead
of the meeting and judges the RBNZ faces a high threshold to validate the
market’s aggressive tightening expectations.
