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February 19, 2025
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RBNZ: 50bp Rate Cut To 3.75% (Consensus 3.75%) in Feb-25

  • The Monetary Policy Committee reduced the OCR by 50 basis points to 3.75%, in line with expectations, citing declining inflationary pressures and significant economic slack, with further cuts likely through 2025.
  • While near-term inflation may experience volatility due to exchange rate depreciation and higher fuel costs, core inflation and inflation expectations remain well-anchored around the target midpoint.
  • Global risks, including trade policy uncertainty and geopolitical fragmentation, pose downside risks to growth. Still, the Committee remains confident that maintaining inflation stability will provide flexibility to respond to future shocks.
February 18, 2025
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Australia: 25bp Rate Cut to 4.1% (Consensus 4.1%) in Feb-25

  • The RBA lowered the cash rate to 4.1% as inflation moderates faster than expected, with underlying inflation at 3.2% in the December quarter, supported by easing wage pressures and subdued private demand.
  • Labour market tightness persists despite overall economic weakness, with the unemployment rate at 4%, sustained employment growth, and high unit labour costs posing potential inflationary risks.
  • The outlook remains uncertain, with global risks including US trade tensions and geopolitical instability, while further rate cuts will depend on continued disinflation and stable labour market conditions.

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