National Australia Bank: New Zealand’s peak interest rate may drop to 5.25%

We maintain our view that the RBNZ will raise interest rates by 50 basis points to 4.75%. As for the rate path, the RBNZ may also cut its expected peak rate by 25 basis points to 5.25%, citing weaker overall momentum in the economy compared to the November monetary policy forecast. The case for a 75 basis point hike has become less compelling, especially given recent severe weather events.