Latest / Early Edition with Ryan Bridge / John Carran: Jarden Economist and Investment Strategist ahead of today's OCR announcement

Transcript

John Carran: Jarden Economist and Investment Strategist ahead of today's OCR announcement · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: It is ocr day today. Economists, well, I mean, take
• 0:03
  Speaker 1: your pick. Some say one thing, some say another ASB
• 0:05
  Speaker 1: predicting a cut of twenty five basis points B n
• 0:08
  Speaker 1: Z Kiwi Bank also think that they will cut a.
• 0:11
  Speaker 1: N Z isn't ruling out a cut that's sitting on
• 0:14
  Speaker 1: the fence, isn't it? Westpac and Kievi Bank think rates
• 0:16
  Speaker 1: will be held. John Karen is a Jardin economists, investment strategist,
• 0:21
  Speaker 1: and crystal ballgazer. He's with us this morning.
• 0:22
  Speaker 2: A John, Yeah, Good morning, Ryan.
• 0:25
  Speaker 1: What are you picking?
• 0:26
  Speaker 2: Cut?
• 0:26
  Speaker 1: Hold, engage? What's he going to do?
• 0:29
  Speaker 2: Look on we're erring on the side of a hold today.
• 0:33
  Speaker 2: It is a close run thing, though, and we can
• 0:36
  Speaker 2: see that through the disparity of views we're seen.
• 0:41
  Speaker 1: How important is the language that's used around the decision.
• 0:47
  Speaker 2: I think it will be incredibly important. I mean, this
• 0:49
  Speaker 2: is a full monetary policy statement out today, so this
• 0:53
  Speaker 2: will have refreshed forecasts or predictions from the Reserve Bank,
• 0:59
  Speaker 2: and I expect that although they may hold today, they
• 1:04
  Speaker 2: will signal that interest rate cuts are coming very soon,
• 1:10
  Speaker 2: much sooner than they previously indicated.
• 1:14
  Speaker 1: What will that mean for mortgages If they signal cuts
• 1:18
  Speaker 1: are coming. Do mortgages rates drop?
• 1:22
  Speaker 2: Yes? I think they will because what happens is the
• 1:26
  Speaker 2: banks anticipate cuts down the track, and particularly for those
• 1:32
  Speaker 2: fixed term interest rates, the one and two year, three
• 1:36
  Speaker 2: year rates, you will see most likely some cuts to
• 1:42
  Speaker 2: those rates, even if the Reserve Bank stays on hold,
• 1:47
  Speaker 2: but signals that cuts are coming, perhaps as early as October.
• 1:53
  Speaker 1: Okay, well that sounds promising. We'll have to wait and see,
• 1:55
  Speaker 1: obviously for two pm this afternoon. Asb reckons that we're
• 1:59
  Speaker 1: effectively under three percent inflation now, I mean obviously there's
• 2:02
  Speaker 1: a time lag with data, et cetera. Do you agree
• 2:04
  Speaker 1: with that?
• 2:05
  Speaker 2: Yeah, I think I do agree with that. There is
• 2:09
  Speaker 2: a very clear that inflation is coming down. Then even
• 2:13
  Speaker 2: the Reserve Bank admits that they'll be within their one
• 2:17
  Speaker 2: three percent target bend by the third quarter of this year,
• 2:21
  Speaker 2: so you know, it's it's quite clear, and people are
• 2:24
  Speaker 2: expecting that two inflation expectations are coming down and they
• 2:28
  Speaker 2: are expecting things to ease off further.
• 2:32
  Speaker 1: All right, John, thanks so much for your predictions. Hold
• 2:35
  Speaker 1: from from John, but expecting some language softening around cuts
• 2:39
  Speaker 1: later this year. John Karen is the Jardin economist and
• 2:42
  Speaker 1: investment strategistic.
• 2:44
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• 2:47
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• 2:48
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• 2:50
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