Earlier today, the Reserve Bank of New Zealand (RBNZ) kept its interest rates unchanged at 5.50% as the markets had expected. What some NZD traders didn't expect was for the central bank to sound hawkish in its quarterly report. In its statement, the central bank shared that "The official cash rate will need to stay restrictive, so demand growth remains subdued, and inflation returns to the 1% to 3% target range," and added that "If inflationary pressures were to be stronger than anticipated, the OCR would likely need to increase further.” In his presser, RBNZ Governor Orr recognized that their policies are restrictive enough that it "provides us the ability to wait" but that they're also willing to make adjustments if needed. He also warned that their actions won't be bound by meeting schedules so that policy adjustments may happen any time.