The RBNZ’s May 2026 Monetary Policy Statement, which held the official cash rate at 2.25 percent in a 3-3 split vote, drives the 82 percent market-implied probability of a July 8 increase. Officials highlighted near-term inflation pressures from elevated energy and petrochemical prices tied to Middle East developments, with headline CPI at 3.1 percent in the March quarter above the 1-3 percent target and projected to peak near 4.3 percent later in 2026. The statement explicitly noted that tightening would likely begin sooner and proceed more aggressively than the February outlook, lifting two-year swap rates and narrowing the scope for repricing ahead of the July review. With limited economic data releases between meetings, traders assign only 16 percent odds to no change and 2.1 percent to a cut, consistent with the central bank’s forward guidance on restoring price stability.