Fed Chair Kevin Warsh Signals Policy Overhaul as Hawkish Rate Outlook Rattles Markets 
U.S. Stocks End Q2 Higher as Strong Jobs Data and AI Rally Lift Wall Street 
South Korea Signals Possible Interest Rate Hike as Inflation Remains Elevated 
BoE Policymaker Alan Taylor Signals No Need for Interest Rate Hike Amid Iran War Inflation Risks 
Trump Urges Gasoline Retailers to Cut Prices to $2.50 Per Gallon, Warns of Legal Action 
RBA Expected to Hold Interest Rates at 4.35% as Markets Watch AUD/USD and ASX 200 
ECB Keeps July Rate Options Open Amid Iran War Energy Price Risks 
UN Chief Urges Nations to Close $100 Million UNRWA Funding Gap 
Central Banks Eye Gold, Reduce Dollar Exposure as AI Adoption Accelerates: OMFIF Survey 
Japan Signals Preference for Low Interest Rates as BOJ Policy Debate Intensifies 
China Sets 1.25% Overnight Reverse Repo Rate Below Market Expectations 
RBI Hits Pause as Geopolitical Storm Clouds Gather 
China Manufacturing PMI Edges Higher in June as Exports and AI Investment Boost Growth 
Asian Stocks End Strong Quarter as Dollar Surges, Yen Hits 40-Year Low Ahead of US Jobs Data 
New Zealand’s central bank is expected to cut its official cash rate (OCR) by 25 basis points to 3.50% this Wednesday, responding to growing global economic uncertainty fueled by new U.S. tariffs. All 31 economists in a Reuters poll predicted the Reserve Bank of New Zealand (RBNZ) would move ahead with the cut, marking a total reduction of 175 basis points since August last year.
The RBNZ had previously signaled potential rate cuts in April and May, contingent on evolving economic conditions. However, recent events—particularly the U.S. announcement of sweeping tariffs, including a 10% tariff on New Zealand goods—have heightened fears of a global recession. As New Zealand’s second-largest export destination, U.S. trade policy changes could significantly affect the local economy.
Markets now anticipate the OCR could fall to 2.75% in the coming months, below last week’s forecast of 3%. The NZX-50 index has dropped 4.4% since the tariff announcement, and the New Zealand dollar has weakened by 4.1%, now trading at US$0.5560.
Stephen Toplis, Head of Research at Bank of New Zealand, emphasized the importance of consistency from the RBNZ, though he acknowledged that the bank’s forward guidance may shift in light of global instability. As the first central bank to meet following the tariff news, the RBNZ’s response could set the tone for others.
Westpac chief economist Kelly Eckhold noted that financial volatility could tighten conditions further, reinforcing the case for continued rate cuts and an ongoing easing bias. While the direct impact of U.S. tariffs on New Zealand exports may be limited, reduced growth in key trading partners like China and Australia poses medium-term risks to export demand and economic performance.
