Latest / Early Edition with Ryan Bridge / Mike Jones: BNZ Chief Economist ahead of today's GDP release

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Mike Jones: BNZ Chief Economist ahead of today's GDP release · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: A quarter to GDP numbers out today. They are looking backwards.
• 0:03
  Speaker 1: How much did we grow by as an economy or not.
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  Speaker 1: We're joined by Mike Jones, b n Z Chief Economists.
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  Speaker 1: Good morning, Mike, so am Z says back point one,
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  Speaker 1: ASB back point three west Pac point four. What do
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  Speaker 1: you say, Well, we don't.
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  Speaker 2: Think we're going to pay for pretty reading. Our pickers
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  Speaker 2: are point four percent contraction over the quarter. So yeah,
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  Speaker 2: pretty grim reading. And if we were right on that,
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  Speaker 2: that would be the fifth quarterly contraction out of the
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  Speaker 2: last seven. So very much in keeping with this idea
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  Speaker 2: that we've been in a rolling recession for almost two
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  Speaker 2: years now and.
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  Speaker 1: We're really feeling it. How important is the size of
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  Speaker 1: this recession? You know, if if it's nearly a full percent,
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  Speaker 1: I mean, obviously the Reserve Bank saying half a percent,
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  Speaker 1: your same point four. If it was one percent, would
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  Speaker 1: we see the Reserve Bank cutting rates? You know, bigger sooner?
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  Speaker 2: It's possible. Look, as you said, the Reserve Bank has
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  Speaker 2: braced for a pretty nasty number already. They've got a
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  Speaker 2: one point five percent decline baked into their numbers. That's
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  Speaker 2: a bit weaker than what we've got and probably the
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  Speaker 2: consensus as well, So it would take a real clanger,
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  Speaker 2: I think, to throw the Reserve Bank off its stride.
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  Speaker 2: Same there's better of volatile, So we'll just have to
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  Speaker 2: see what we get. Probably today that the bigger piece
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  Speaker 2: of news for interest rates in New Zealand and the
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  Speaker 2: Reserve Bank may well be what the US feder Reserve
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  Speaker 2: does with interest rates in.
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  Speaker 1: Just a few moments totally. We're all standing by for that.
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  Speaker 1: Mike Hoskins Show will have coverage of that after six
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  Speaker 1: o'clock obviously once the decisions out. But how might that
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  Speaker 1: affect us.
• 1:42
  Speaker 2: Well, we've obviously started the process of off cutting rates already.
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  Speaker 2: The Reserve Bank has lower rates in August. This will
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  Speaker 2: be the first cut from the US, so we ultimately
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  Speaker 2: go our own way on instrate to the Reserve Bank
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  Speaker 2: would be very would be the first to say that,
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  Speaker 2: but FED a reserve is still very influential for interest rates.
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  Speaker 2: Interest rates in New Zealand have been falling wholesale rates
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  Speaker 2: over the past couple of weeks as we sort of
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  Speaker 2: look ahead and baking in what's going on in the US.
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  Speaker 2: So BED decides to get aggressive and cut take fifty points, Well,
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  Speaker 2: that may just put a bit more pressure on interstrates
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  Speaker 2: in this part of the world and may just embolden
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  Speaker 2: that there result back here in New Zealand to do
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  Speaker 2: the same.
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  Speaker 1: Interesting Mike, thank you for that. Mike Jones, Ben's in
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  Speaker 1: chief economists that for.
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• 2:34
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