An investment analyst believes Kiwis with mortgages still have a while to wait for the Reserve Bank (RBNZ) to cut interest rates.
It comes after the RBNZ decided to hold the Official Cash Rate at 5.5 percent for the sixth straight meeting after tightening it 12 consecutive times before that.
The move is in line with what many economists predicted but the bank has poured cold water on any hopes there might be a reduction in the OCR soon.
The central bank claims while most measures of inflation are easing, hotspots remain, and interest rates will stay until they are all out.
Milford Asset Management investment analyst Katlyn Parker was singing from the same tune as the RBNZ saying cuts are still a while off.
"The market is expecting cuts to start in the second half of this year. The RBNZ in their updated forecast did bring those cuts forward, but it's still well into 2025 when they're currently expecting interest rate cuts to happen," she said.
"It is important to remember that they constantly reassess these decisions and once they tell the public and the market that interest rate cuts are happening and they're happening soon, that's going to see your rates actually start to fall down further.
"So they're very cognizant of this."
Parker told AM on Thursday morning all eyes are being kept on the data, particularly inflation figures.
"They are viewing that inflation is more balanced, we are definitely seeing it come down a bit but it's still extremely strong," she told AM co-host Lloyd Burr.
"I would imagine that if we get any data, wage inflation, inflation expectations, if they start to pick up or remain quite strong, you'll start to see the market push out those interest rate cuts into next year and that's what we're starting to see offshore as well."
Inflation has been a headache for the RBNZ and Kiwis and has remained stubbornly high over the last two to three years.
Inflation peaked at 7.3 percent in July 2022 and is currently down at 4.7 percent, still well above the Reserve Bank's (RBNZ) target of between 1 and 3 percent.
Burr then asked if the RBNZ's decision on Wednesday was good news for the markets.
"Interest rates move lower on the back of it. We had the two-year interest rate was down about 0.2 percent and that was because there was a 20-30 percent chance of a hike yesterday, so we saw that unwind a bit," she said.
"We also saw currency move lower. And to be honest, the share market largely ignored it because we're coming to the end of reporting season and they're way more focussed on that in terms of equities."
Watch the full interview above.
