The so-called Super Thursday turned into a damp squib yesterday when the Reserve Bank and the United States Federal Reserve left their rates unchanged.
BNZ senior economist Craig Ebert had earlier predicted the Reserve Bank would cut its rate from 2.25% to 2%, given the state of the economy, with a further cut pencilled in for June.
However, he said yesterday he was glad to be wrong.
The Reserve Bank maintained a clear easing bias in saying future policy easing might be required. But, all said, it did not feel like a strong easing bias.
"Today's commentary sounds more like a central bank wanting to buy time in order to have a better look at things at the full June Monetary Policy Statement. And this seems fair enough, given everything that has been lurching around over recent months and quarters.''
Reserve Bank governor Graeme Wheeler did have a swing at the dollar, by saying it remained higher than appropriate.
But he probably felt he needed to do so, knowing the dollar would move higher on the no move in the OCR, Mr Ebert said.
ANZ chief economist Cameron Bagrie said he had the impression there was a deliberate attempt by the Reserve Bank to maintain a clear "doveish tone'' yesterday, perhaps recognising the possible consequences on the dollar of a more upbeat message.
The door to a June OCR cut remained open and that remained the ANZ forecast for now, but it remained very much a close call, he said.
Reasons for cutting existed but, when weighed against a domestic economy still operating near trend, evidence core inflation was stabilising and capacity pressures intensifying, re-leveraging behaviour evident and the housing market booming, the ANZ continued to hold the view additional easing might not be in the best interests of the economy, Mr Bagrie said.
Labour finance spokesman Grant Robertson said the Government had put the economy in a holding pattern, leaving Mr Wheeler with little room to manoeuvre as he tried to balance a rampant housing market with non-existent inflation.
"Mr Wheeler can't do it all on his own. The Government needs to take action on multiple fronts that will make it easier for the Reserve Bank to do its job.
"The upcoming Budget is the time for National to drop its increasingly arrogant belief it has all the answers. It is genuinely becoming out of touch with the worries of middle New Zealand,'' he said.
The Fed left interest rates unchanged but kept the door open to a rise in June.
At the same time, it showed little sign it was in a hurry to tighten monetary policy amid an apparent slow down in the US economy.
In a statement largely mirroring the one issued after its last policy meeting in March, the Fed's rate-setting committee described an improving labour market but acknowledged economic growth seemed to have slowed.
It said it was closely watching inflation and noted global economic headwinds remained on its watch list, although it made no mention of the risks they posed, as it had last month.
"The committee continues to closely monitor inflation indicators and global economic financial developments,'' the US central bank said.
Brazil's central bank left interest rates at a near 10-year high in a bid to ease inflation in what could be the board's last decision before a likely change in government.
The bank's board, known as Copom, unanimously voted to keep its benchmark Selic interest rate at 14.25%.
At a glance
• OCR held at 2.25%, with easing bias.
• US Fed Reserve hold rates unchanged at near zero.
• New Zealand dollar rose, US dollar remained flat.
• Signs of recovery in global economy.
