Market pricing and major bank forecasts also point to the OCR staying on hold at 2.25% in February, reinforcing the wider consensus that the next move is unlikely to be a cut.
Consensus builds for late‑2026 tightening
Looking a year ahead, members’ preferred OCR settings cluster between 2.25% and 2.75%. NZIER says this reflects a broad consensus that RBNZ should commence raising the OCR in the second half of 2026.
Board members broadly expect earlier rate cuts to keep supporting demand over the next year, gradually absorbing the remaining slack in the economy. They also emphasised the need for RBNZ to keep a close eye on inflation expectations as growth firms up, warning that postponing rate increases for too long could ultimately force policy settings into an overly tight territory.
For mortgage advisers, that backdrop supports a “higher for longer” narrative from late 2026, rather than an extended low‑rate environment.
Inflation worries underpin cautious stance
Individual comments highlight why the Shadow Board still favours a hold today. BNZ‘s Stephen Toplis (pictured left) said “growth and inflation have proven stronger than expected and there is a mass of stimulus left in the system. The sooner that stimulus is reduced the greater the chance that the eventual move in interest rates will be modest.”