New Zealand - Another step on the way down to rates of 2.0%

The most important part of today’s policy announcement by the Reserve Bank of New Zealand is not the third consecutive 0.25% cut in interest rates, to 2.75%, but the Bank’s growing acceptance that a marked economic slowdown is underway. Even so, we still think that the RBNZ is underestimating the size and duration of the slowdown, which is why we believe that interest rates will fall to 2.0%.  

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