Why lifting interest rates now was a bad idea
RBNZ hikes OCR by 25bps to 0.5% and sees more hikes to come, despite noting acute stress in Auckland and services sector businesses and a cooling of global and Chinese growth outlooks
TLDR: The Reserve Bank has just increased the Official Cash Rate by 0.25% to 0.5%, its first hike in seven years and in line with financial market and bank economist expectations.
It said it expected to keep increasing interest rates over the next year or two towards more neutral levels, which are seen closer to 1.5-2.0%. That would lift mortgage rates …