And there it is—the good news we've all been waiting for. The RBNZ has delivered a 0.25% OCR cut today, and interest rates are finally on the way down again. So, what does that mean for Kiwi borrowers, and the New Zealand economy?
The RBNZ's outlook on interest rates has chopped and changed pretty dramatically in recent months. Ahead of this week's OCR announcement, on August 14th, David Cunningham looks at what's behind this flip-flopping, and how it might be mitigated in future.
It finally looks like inflation is back in its box, and that means interest rate falls should be on the cards for sometime in 2024. But—with all the latest data pointing to a country firmly in recession—what cost has our battle against inflation had for New Zealand's economy?
Every quarter, the NZIER surveys a bunch of economic forecasters—from some of our largest financial institutions—to get their predictions of what's in store for our economy. Now, we know even the experts get it wrong sometimes, but how can they be getting it *this* wrong?
Historically, and particularly in the last few years, what happens with NZ interest rates has been really closely tied to what's happening with US rates. But with NZ's economy doing it really tough right now, guest writer Rodney Dickens thinks that's about to change.
Despite plenty of economic data showing enough damage has been done, the RBNZ is adamant rate falls won't be on the cards until 2025. And the reason for that, it turns out, is all down to a single number in the RBNZ's latest inflation forecast.
The Reserve Bank has a tradition of being too slow to hike and cut and is likely to continue this tradition because of its poor forecasting and lack of understanding of what is going on at the coalface of the economy. The market, however, is usually quicker to respond — will it be the one to lead a fall in interest rates this year?
Most commentators are picking it'll be late 2024 (or worse, 2025) before interest rates start falling again — but the Chief, David Cunningham, reckons there's a strong case for the RBNZ to begin dropping rates much sooner.
It's tough going out there at the moment, and we're all feeling it in one way or another. The housing market is subdued, and NZ economic data is painting a pretty bleak picture. So the question on everyone's minds is: when will interest rates start to fall again?
According to bank economists, NZ’s latest inflation stats make it clear it’s far too soon think about dropping interest rates. But the Chief, David Cunningham, reckons the official numbers don’t paint an accurate picture of the situation.
New research from the RBNZ highlights the four key indicators that (it believes) give us the best idea of where inflation is at, and where it's headed. But Squirrel guest blogger, Rodney Dickens, reckons it's the RBNZ's judgement that needs work more than anything.
Once inflation's got its hooks in, it can take years for interest rate hikes to trickle through and reverse the damage. But, as Rodney Dickens explains, a more proactive approach from the RBNZ could go a long way to solving that problem.