Could interest rates really, actually drop as we enter anemic growth with inflation?

The OCR has remained the same since June 2023 and it is very likely to remain at the same level till the second part of this year. Could fixed interest rates drop before then?

Well there are two factors which may bring relief to home owners sooner.

1. The speed at which inflation(4.7%) is likely to cool down, currently running at way above the target range(1-3%)
2. Competition for market share, banks do actually compete with each other. As the government changes lending rules(CCCFA) and lending growth is viable, the banks would likely eye getting the most of that growth.
3. The outlook of the central banks reaction to the economic environment, as the economy stutters along. If the central bank sounds softer, the wholesale markets could take this to mean that higher inflation is palatable, while the economy is anemic.