After last week’s GDP result caught most of the market off-guard—coming in even worse than anticipated at -0.90%—interest rates look set to fall further over the next fortnight or so.
Some are now calling on the Reserve Bank to go big at our next Official Cash Rate (OCR) announcement on 8 October, and cut by 0.50% instead of the 0.25% currently in the forecast.
Regardless of which path the RBNZ takes, lower interest rates are on the horizon.
The best one-year rate on offer at the moment is 4.70%—but that's expected to drop below 4.50% in the coming weeks.
Despite how doom and gloom the latest GDP stat appears—especially as the latest in a long string of weak economic data—it’s worth remembering that it does date back to the June 2025 quarter.
Things have moved on since then, and it feels as though we’re starting to see some positivity flow through as more and more borrowers start to benefit from rolling onto lower rates.
So, if we’re not already at the bottom of the interest rate cycle, we’re getting very close.
With long-term rates below 5.00%, borrowers should feel confident about locking in for slightly longer, if that’s the approach that’s right for them.
Check back in next week for the latest on New Zealand interest rates.
