NZIER Board Split on OCR Decision Amid Economic Slowdown

The NZ Institute of Economic Research (NZIER) shadow board is divided on whether the Reserve Bank of New Zealand (RBNZ) should lower the Official Cash Rate (OCR) from its current 5.50%. Over half of the board members advocate for a 25 basis-point cut due to the slowing economy and inflation nearing the target range. Others argue for maintaining the rate, citing insufficient economic data to justify a reduction. Despite the split, most agree that an easing cycle should begin soon, possibly at the next meeting. Meanwhile, Squirrel Mortgages CEO David Cunningham criticizes the RBNZ's recent inconsistent messaging, attributing it to the consensus-driven approach of the Monetary Policy Committee (MPC). Cunningham suggests that this approach leads to "groupthink" and calls for changes in how the MPC operates to prevent undue influence from certain members.

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