In modern economies, central banks adjust benchmark policy interest rates to manage inflation and stabilize economic activity. Fluctuations in these interest rates have strong transmission effects on financial markets, including the equity market.
Table 1 shows how the Reserve Bank of New Zealand (RBNZ) adjusted its benchmark Official Cash Rate (OCR) over an eight-year period.
| Date | Official Cash Rate (%) |
|---|---|
| 2014-01-01 | 2.50 |
| 2014-07-01 | 3.25 |
| 2015-01-01 | 3.50 |
| 2015-06-01 | 3.25 |
| 2016-03-01 | 2.25 |
| 2019-04-01 | 1.75 |
| 2020-03-01 | 0.25 |
| 2021-05-01 | 0.25 |
Using the data in Table 1, explain what is likely to have happened to New Zealand share prices at the start and the end of the period shown.
