If the Reserve Bank was hoping to see generally higher mortgage and deposit rates as a result of the start of its OCR tightening cycle, and accompanying talk of “normalisation” ahead, then it’s probably been sorely disappointed. This needs to be kept in mind when weighing all the evidence about what’s occurring in the economy and its inflation pressures. If the RBNZ is contemplating a near-term pause in its OCR cycle it will surely be weighing this against the risks that it could lose its initiative with New Zealand’s interest rate curves, no matter how much the Bank tries to back this up with tough talk about the OCR for “later down the track”. Some credibility might be on the line, yet again
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