Nov 22, 2022 • 5M
Get ready for a big rate hike
Economists see the Reserve Bank hiking 75 basis points at 2pm, but its forecasts of the future OCR will decide whether banks pump up their mortgage 'specials' well above 6%
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TLDR: Banks have been holding back from passing on higher wholesale rates into their discounted one and two year mortgage rates, but they could capitulate and bump up their rates well over 6% if the Reserve Bank hikes 75 basis points and forecasts a near 5% OCR next year.
Te Pūtea Matua (the Reserve Bank) will deliver its last monetary policy decision of the year at 2pm today and could well ‘front load’ a very big rate hike to send a very clear inflation-fighting message to consumers before Christmas, knowing it can’t send another strong signal until February 22.
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