RBNZ chief: rates still supportive after hike cycle

Brenan's remarks indicate the central bank is not deviating meaningfully from its earlier direction, with the rate path closely resembling the one set out in May. This should curb any dramatic adjustment in market expectations for further tightening after Wednesday's decision. Her reiteration that policy continues to provide support even after shifting the cash rate toward neutral, together with a call to carefully gauge the effects of past increases, points to a strategy driven by incoming data rather than a fixed schedule. While acknowledging another rate rise is probable, the uncertainty over its timing leaves the committee in full control and should discourage sharp moves in either direction. Her clear statement that the forthcoming election does not influence policy is a routine yet important reassurance for markets concerned about political pressure on monetary decisions.

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Earlier:

• RBNZ lifts OCR to 2.75%, says gradual tightening reduces risk of bigger hikes later

Brenan signals further rate increases lie ahead without specifying a timeframe.

Summary:

• RBNZ Governor Anna Breman anticipates economic expansion will become stronger and more widespread
• The governor states that the OCR projections largely match earlier forecasts, with a track very close to May's
• Breman says the committee can curb inflation while still backing the economy
• She describes the OCR as heading toward neutral but still accommodative
• According to Breman, the committee might need time to evaluate the present policy stance
• She underscores that the RBNZ is not following a predetermined path, and the timing of any future rate increase is very uncertain
• The governor confirms the upcoming election does not affect policy choices
• Breman says a further OCR hike is probable, with the committee studying how past increases affect the economy before proceeding

Reserve Bank of New Zealand Governor Anna Breman told journalists after Wednesday's rate announcement that the central bank's interest rate outlook is largely unchanged from the forecasts it released in May, providing few signs of a major change in its perspective following the latest quarter-point move. Breman said she expects New Zealand's economy to gain strength and expand more broadly, reinforcing the more upbeat stance the committee adopted in its official statement earlier that day.

The governor said the committee is confident it can keep reducing inflation while maintaining support for the broader economy, characterising the current adjustment as moving the OCR toward neutral rather than into restrictive territory. She took care to stress that policy stays supportive even after Wednesday's increase, implying the bank does not see current settings as hindering growth. At the same time, she said the committee might require some time to fully gauge the effects of its existing policy stance before committing to further moves.

On the outlook, Breman made clear the RBNZ is not following a fixed plan and that any future rate increase remains highly uncertain in its timing. That remark reinforces the committee's overall message that future decisions will be shaped by how inflation risks evolve rather than a set calendar. Still, Breman said it is likely there will be another OCR increase at some stage, with the committee first wanting to see how earlier rate rises are filtering through the economy before proceeding.

When asked about the political landscape, Breman said New Zealand's forthcoming election does not affect the committee's policy decisions, a remark aimed at underscoring the RBNZ's independence from political cycles as it continues its gradual tightening. Overall, her comments suggest a central bank at ease with its current direction and assured of its ability to handle the trade-off between inflation and growth, while deliberately avoiding any promise on when its next move will come.