RBNZ Chief Economist Conway says New Zealand is feeling the effects of oil price shock, while he affirm's direction of the OCR is most likely up and the next OCR decision is wide open

Remarks from a chief economist sit below governor commentary in the signalling hierarchy, but they carry weight on framework and reaction function, and acknowledging an energy supply shock while still pointing the OCR higher is a hawkish-leaning combination: the bank is treating the oil pass-through as an inflation risk to lean against rather than a growth drag to look through. Small open commodity economies have historically split on exactly this question, with the deciding variable being whether the shock bleeds into core and wage-setting or stays a relative price move; the former path has tended to force tightening into weakness. The 'wide open' framing on the next decision is deliberate optionality language, a pattern central banks use when they want meeting pricing to stay live rather than drift toward a skip. The transmission to watch runs through the front end of the New Zealand curve and the 2-year swap rather than the long end, and through NZD via the rates differential channel, with the caveat that an oil-driven terms-of-trade impulse can pull the currency the other way. Follow-ons are whether other RBNZ speakers echo the upward bias, the next domestic inflation and labour prints, and whether crude holds at levels that keep the pass-through narrative intact.