How much to move by, and when?

<p>Kia ora,</p><p>Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the international edition from Interest.co.nz.</p><p>And today we lead with news the timing of the next policy rate moves are top of mind in both the US, and New Zealand.</p><p>But first in the week ahead, the spotlight in the US will be on the debt ceiling negotiations, FMOC meeting minutes, and several Fed speeches. Additionally, investors will be closely monitoring data on personal income and spending, PCE prices, the second estimate of GDP growth, corporate profits, durable goods orders, services and manufacturing PMIs, as well as new and pending home sales.</p><p>More generally, fresh May PMIs are anticipated for the UK, Australia, the EU, Japan, France, and Germany. Finally, inflation rates for the UK and South Africa will be released, and monetary policy decisions are awaited for China, South Korea, Indonesia, Turkey, South Africa, and of course from the RBNZ on Wednesday.</p><p>There are now just 20 weeks until the October 14 election. There is an RBNZ MPS on Wednesday, and another on August 16 just 60 days ahead of the election. There are interim rate reviews on July 12 and October 4. Almost certainly the RBNZ would not move rates on October 4 because of the risk of being seen to influence the election. They might feel uncomfortable on August 16 for the same reason. Assuming those two dates are off the table and there is no big immediately pressing issue, the only opportunities to adjust rates until the post-election MPS on November 29, are on Wednesday and July 12. If their judgement is that Budget 2023 adds to inflationary pressures, the Wednesday MPS reassessment is the most likely time they will pull the trigger. A bit more than +35 bps is priced in, so the markets are unsure whether we are facing +25 bps or +50 bps on Wednesday. <a href="https://www.interest.co.nz/bonds/121237/david-hargreaves-examines-coming-weeks-reserve-bank-ocr-r