New Zealand cuts rates 25 bps, flags slightly deeper easing cycle as global risks mount
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New Zealand Cuts Rates by 25 Points
Above: Signage outside the Reserve Bank of New Zealand building in Wellington, New Zealand, on Nov. 27, 2024. Image copyright: Mark Coote/Bloomberg via Getty Images
The Spin
Pro-government narrative
The RBNZ’s rate cut proves that government’s policies are working. Compared to the previous Labour government, inflation has fallen from 7% back down to target levels while the economy is beginning to recover. This is good news for countless New Zealanders who will see more money in their pockets due to lower interest rates, and it's a taste of what's to come as the National Party presses forward to reduce the cost of living even further.
Opposition narrative
While the OCR cuts are welcome news for homeowners, we must remember why the RBNZ has taken this decision. Rather than being a positive sign, the rate cuts are a response to an increasingly unstable global economy wracked by President Trump’s tariffs and trade wars, and one that will frustrate New Zealand’s future growth. The OCR cuts must be understood for what they are; mitigating policy, not government achievement.