Having poured gasoline on the inflationary fire for most of 2021, printing money and keeping the Cash Rate close to zero, now the Reserve Bank veers like a drunken sailor in the opposite direction, slamming on the brakes, probably way too hard, causing mortgage distress and raising the chances of a full-blown recession.
So why did the RBNZ raise the OCR by 50 basis points today when supply chain pressures are easing from Covid, the war is going badly for Putin and inflationary expectations are dropping in the United States? So the Bank's top brass hang onto their jobs, of course.
The Communications / PR / Marketing department of the RBNZ is running monetary policy these days, not economic experts. The Comms people want headlines like "RBNZ leads the world in monetary tightening" and "RBNZ turns hawkish on inflation" so the lot of them don't get fired. The Bank's staffers got their feelings hurt by those of us who blamed them for dropping the ball on inflation, which they did .. for all of 2021. Now they're desperate to get more favorable headlines. Yes, its a Bank run by spin, politics & career ambitions, not run for the public interest.
So at present, when uncertainty is high concerning which way inflation will now go, the Bank goes and dumps on ordinary Kiwis, throwing thousands into financial distress, right in the middle of a cost-of-living crisis, just to save their own banking careers.
Time for the RBNZ Chair to resign and his board to be replaced. Shame on him, and on Grant Robertson, for having reduced the Bank to an institution no longer respected by the economics profession, not to mention, the Kiwi public.