The Reserve Bank of New Zealand is expected to raise interest rates for the third consecutive time, with the general election potentially becoming a window for policy shifts.

1. The market widely expects the Reserve Bank of New Zealand to raise the official cash rate for the third consecutive time at Wednesday's meeting. Surveys show that over 80% of economists anticipate a 25 basis point hike to 3.00%, while nearly 20% expect rates to remain unchanged. Reserve Bank of New Zealand Governor Brehman may hope that the November 7 general election provides some space for the central bank to return to a more neutral policy stance. 2. New Zealand’s unemployment rate rose in the second quarter to its highest level in ten years. If the labor market deteriorates further, it will limit the room for further rate hikes; otherwise, the economy risks another recession. Analysts believe that monetary policy alone is unlikely to yield positive results, and targeted fiscal support is also needed. 3. Although third-quarter inflation slowed year-on-year to 3.7%, below the previous quarter’s 4.1%, stronger-than-expected GDP data for the June quarter still supports the Reserve Bank of New Zealand in continuing to tighten policy. The Middle East conflict shows no signs of resolution in the short term, and Brent crude oil prices are approaching a six-month high. Since New Zealand completely relies on imported fuel after the last refinery was closed in 2022, it is more vulnerable to inflation shocks from oil price volatility and supply risks. 4. The New Zealand dollar’s upward momentum against the US dollar has been weak recently, facing further downside risk. The Reserve Bank of New Zealand’s statement and communication after Wednesday's meeting will be key in the short term: if fresh hawkish signals emerge, NZD/USD may test resistance near the 100-day moving average at 0.5768; if the market sees signs of a slower rate hike cycle, the exchange rate may test support near 0.5580.