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ubs forecasts potential 50 basis point rate cut by reserve bank of new zealand
UBS forecasts that the Reserve Bank of New Zealand (RBNZ) may implement a significant 50 basis point rate cut in April, driven by the adverse effects of U.S. tariffs on global growth. The bank suggests a terminal rate of 3.0%, potentially dipping below the neutral rate due to economic slack.While initially expecting a gradual approach with 25 basis point cuts, UBS now sees the need for a more aggressive stance as the tariffs pose downside risks. RBNZ officials have acknowledged the detrimental impact of tariffs on growth, with potential inflationary effects in the long term.
ubs forecasts potential 50 basis point rate cut by rbnz amid tariffs
UBS forecasts that the Reserve Bank of New Zealand (RBNZ) may implement a significant 50 basis point rate cut at its April meeting due to the adverse effects of US tariffs on global growth. This aggressive move could lower rates to 3.0%, potentially dipping below the neutral rate amid economic downturns. The RBNZ's proactive stance contrasts with other central banks, as it navigates the complexities of tariffs that could lead to disinflation in New Zealand while impacting inflation dynamics.
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