US tariff shock could ease NZ mortgage rates before sting in the tail

Short‑run disinflation, longer‑run inflation risk

Trade diversion, a firmer exchange rate, and weaker global growth push down import prices in the early years, lowering headline inflation and allowing the policy rate to fall modestly below its counterfactual path.

Over time, however, RBNZ warns that global supply chains become less efficient as firms adjust to higher tariff barriers. This gradually lifts import prices, with the note finding that “over time however, global supply chains become more inefficient contributing towards higher import prices, creating some inflationary pressure by around 2030.”

For mortgage advisers, the message is that any rate relief driven by the tariff shock is likely to be temporary.

Read the RBNZ analytical note here.

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