Markets, Mystics & Mayhem podcast: Ep49

Published on 23 September 2025

We’ve changed our call. We now expect a 50bps cut in October, followed by a 25bps cut in November. The cash rate should end the year at 2.25%. Why? because it has become crystal clear that the Kiwi economy is not recovering. So in the wise words of Nike, “Just do it”

Jarrod_Kerr_Profile-500x500-v2

Jarrod Kerr

Chief Economist
KB_MaryJo_Profile_500x500

Mary Jo Vergara

Senior Economist
KB_SabrinaDelgado_Profile_500x500

Sabrina Delgado

Economist

Just do it: 75bps needed now

A year on from the deep and destructive recession we were in in 2024, the Kiwi economy has slammed back into reverse. The GDP numbers for the June quarter were far worse than anyone had expected and proved once again that the RBNZ has not yet delivered the appropriate monetary policy setting. Weakness remains broad based with 10 out of the 16 industries in decline. And over the year the economy has shrunk a further 0.6%. It’s simply not what you’d expect a year after the severe recession. We should be recovering by now. But we're not. And the weakness demands more rate relief.

Kiwibank Week 49 - Thumbnail74
Listen on Spotify Listen on Apple

TAGS

All content is general commentary, research and information only and isn’t financial or investment advice. This information doesn’t take into account your objectives, financial situation or needs, and its contents shouldn’t be relied on or used as a basis for entering into any products described in it. The views expressed are those of the authors and are based on information reasonably believed but not warranted to be or remain correct. Any views or information, while given in good faith, aren’t necessarily the views of Kiwibank Limited and are given with an express disclaimer of responsibility. Except where contrary to law, Kiwibank and its related entities aren’t liable for the information and no right of action shall arise or can be taken against any of the authors, Kiwibank Limited or its employees either directly or indirectly as a result of any views expressed from this information.

You may also be interested in

Markets, Mystics & Mayhem podcast: Ep50

We’re celebrating our 50th episode with special guest Hamish Wilkinson, Senior Dealer in Kiwibank’s Financial Markets team, to unpack our latest FX Tactical. Interest rate differentials are back in the drivers seat. And we’re diving into the performance and outlook for the Kiwi dollar against the Greenback, Aussie dollar, Sterling, Euro and Yen.

Markets, Mystics & Mayhem podcast: Ep48

We’re back with part two of our special episode featuring Wildlife Economist and Massey University lecturer, Brendan Moyle. And this time we’re delving into Brendan’s fascinating research in wildlife economics, exploring how economics can be applied to the conservation of endangered species.

Markets, Mystics & Mayhem podcast: Ep47

This week we’re joined by a very special guest: Brendan Moyle, an environmental and wildlife economist (and lecturer) from Massey University, to delve deep into the complexities of climate change.

Markets, Mystics & Mayhem podcast: Ep46

Adrian Lodge – Senior Financial Markets Dealer – is back on the pod (in familiar attire), and a lot has happened since last September. Back then, we were heading into the US election, central banks were at the start of the easing cycle, and the Kiwi dollar was climbing towards 64c. Today, tariffs dominate the headlines and uncertainty remains elevated.

Markets, Mystics & Mayhem podcast: Ep45

After two years of forecasting, praying and rain dancing for a 2.5% cash rate, the RBNZ finally signalled such a move at their August MPS. And they did so with plenty of conviction. The OCR track was massively lowered, now signalling an 80% chance of a move to 2.5%. This is great news for Kiwi households and businesses.

See all