While the committee was tasked with trying to reach a consensus, it was “not unusual to have a vote at this point in the economic cycle”, Hawkesby said.
The last time the committee went to a vote was two years ago, when the OCR was near its peak.
“Turning points or inflexion points are the times we are more likely to vote,” Hawkesby said.
The vote also reflected the “increased uncertainty” in the current global economic environment because of US trade policy, he said.
While mention of a turning point might suggest the OCR cuts are nearly done, all options remain on the table.
The RBNZ has produced a forecast rate, which has the OCR at 2.85% by the end of the year.
The track implies at least one more cut, possibly two, before the year’s end.
Yet, countering that, Hawkesby said the committee currently had no clear bias as to what its next move will be in July.
As the RBNZ has stressed many times in the past, these rate tracks are not forecasts it expects people should count on.
They will change as the facts change.
One of the big problems with making hard and fast forecasts was spelt out in the scenario analysis the RBNZ provided.
We can all see that there is trade disruption coming because of US tariff policy.
But it is currently far from clear how much.
The RBNZ assumes that whatever trade deals are or aren’t reached in the coming month, we can now expect lower global growth than we did in February.
What is less certain is whether the fallout from US tariffs will be inflationary or disinflationary.
Its central scenario suggests that trade disruption means lower GDP growth and is mildly disinflationary.
But as this is still far from certain, the RBNZ produced two alternative scenarios.
Both scenarios assume our trading partners’ GDP growth is lower than in the central projection, “but the extent to which this reflects weaker demand or supply differs”.
“In the first scenario, more significant increases in overseas production costs result in higher imported inflationary pressure,” the RBNZ says.
“In the second scenario, a weaker global economy and beneficial trade diversion for our imports contribute to weaker demand for our exports and lower imported inflation than assumed in the central projection.”
In other words, inflation could go up or inflation could go down.
“With the OCR approaching the neutral zone and enormous uncertainty about the global growth outlook and how that will impact the local economy, there’s little to be gained from betting the house on any one particular scenario unfolding,” said ANZ chief economist Sharon Zollner.
ANZ is still forecasting the OCR will be cut to 2.5% by the end of the year – a gloomier outlook than most economists.
“We didn’t expect the RBNZ to feel the need to put that many cards on the table as yet,” Zollner said.
“The domestic data could start to surprise on the upside. Or the global tariff situation could be resolved with less angst than expected, leaving the New Zealand economy to get on with the business of recovery.”
Meanwhile, if downside risks eventuated, the RBNZ was in a good place to respond, she said.
“Yes, some measures of inflation expectations have lifted recently, but capacity indicators continue to indicate that the output gap is negative and the economy in a disinflationary state.”
BNZ head of research Stephen Toplis described yesterday’s call as “a hawkish cut”.
The RBNZ now had baked in a very low trajectory for growth for the next three published quarters, he said.
A 0.4% increase is expected for the March quarter, 0.3% for June and just 0.2% for September.
“This is important because there is only a low chance the bank will be surprised to the downside on these projections unless we are clobbered by a global downshift,” he said.
That meant the bar for the OCR to go to 2.5% was now higher.
“Prior to this statement, we had said the balance of risk to our 2.75% forecast was evenly balanced. We now think the pendulum has swung modestly towards 3% being the more likely alternative scenario.”
Westpac chief economist Kelly Eckhold said the next cut now looked more likely to come in August, with the rate being left on hold at the July meeting.
“It’s too early to call time on the easing cycle. But you never know it’s ended when it ends,” Eckhold said.
“If nothing overtly negative happens to the economy or medium-term inflation outlook between now and August, then there could be no change in the OCR in August also.”
Liam Dann is business editor-at-large for the NZ Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.
