Reserve Bank of New Zealand Considers 50 Basis Point Rate Cut Amid Inflation Concerns

Economists in New Zealand anticipate a 50 basis point cut by the Reserve Bank, potentially lowering the Official Cash Rate to 3 percent and leading to a decline in home loan rates. This move is seen as part of a broader trend of monetary easing, with expectations of further cuts later in the year, although uncertainty remains about the economy's strength. Meanwhile, Federal Reserve Bank of Dallas President Lorie Logan urged caution against premature rate cuts in the U.S., emphasizing that inflation remains above the 2% target, particularly due to persistent non-housing services inflation and tariff risks. Logan highlighted that the Federal Reserve's recent rate cut was merely insurance against rapid labor market decline, not the start of an easing cycle, signaling a "higher for longer" stance on interest rates. She stressed that inflation control remains the Fed's top priority, with the labor market only gradually cooling and further monetary tightening possibly needed to achieve price stability. Overall, these perspectives reflect contrasting monetary policy approaches, with New Zealand moving towards rate cuts while the U.S. maintains a cautious, inflation-focused policy stance.