Recent rises in wholesale funding costs mean that such increases are likely in the near future, he says in this week's BNZ Weekly Overview.
Borrowers keen to fix their mortgage deals have already "missed the boat" in this cycle and are going to have to float and take whatever rates come their way, for at least the next two years, Alexander suggests.
"Beyond the end of 2011 is frankly anyone's guess here and overseas at this stage, but unless the world falls into a dark hole there seems little reasons for expecting a new downward leg of the monetary policy cycle to commence then," he says.
Alexander also states that the Reserve Bank has little chance of being able to keep the Official Cash Rate low until the latter part of 2010, as it has repeatedly stated. He believes it is "highly likely" that the Reserve Bank will need to move earlier than they think.
Positive retail spending data in August, -reflecting that consumer are "opening their wallets", as well as house price rises, are among the factors behind this thinking.
