Would it be so bad if the RBNZ paused and took a breath?

The Reserve Bank is set to raise the cash rate this week (Image: BusinessDesk)

Mon, 11 Jul 2022

Everyone is convinced the Reserve Bank of New Zealand (RBNZ) is going to lift rates by another 50 basis points on Wednesday, but maybe they should hold off.What does the monetary policy committee have to lose if they pause for breath? The official cash rate (OCR) is already at 2%, up from 0.25% only 11 months ago. If it hikes to 2.5% it will have moved 225 basis points in less than a year. They may be “resolute” in their commitment to ensure consumer price inflation returns to within the 1% to 3% band, but NZ rate hikes aren&rs...

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