S&P 500 could hit 8,000 in 2026 on more easing from Fed: JPMorgan
Investing.com-- New Zealand’s central bank lowered its interest rates as expected on Wednesday, saying spare capacity in the economy and moderating inflation provided room to support a still-fragile recovery.
The Reserve Bank of New Zealand (RBNZ) cut the Official Cash Rate (OCR) by 25 basis points to 2.25%. It delivered an outsized 50 bps cut in the previous month.
The Monetary Policy Committee voted 5-1 in favour of the cut. Members weighed holding the OCR steady, but ultimately judged that excess capacity and a subdued inflation outlook gave scope to lean against a slower recovery.
The central bank said annual consumer inflation edged up to 3% in the September quarter, the top of its 1-3% target band, but noted that both core and non-tradables inflation continued to ease.
With significant slack in the labour market and subdued domestic demand, headline inflation is expected to return to around 2% by mid-2026, the RBNZ said in a statement.
Economic activity weakened through mid-2025, with GDP contracting 0.9% in the June quarter, though the RBNZ said this likely overstated underlying conditions due to temporary statistical factors.
Recent indicators point to stabilising demand, firmer household spending and early signs of improvement in labour market conditions, it added.
The central bank said lower interest rates were flowing through to the economy, with easing mortgage rates reducing financial stress. The New Zealand dollar has also fallen since August, supporting exporters.
The kiwi dollar’s NZD/USD pair jumped over 1% to NZ$0.57 after the rate decision.