Latest / Best of Business / Jenee Tibshraeny: NZ Herald Wellington business editor on what the Middle East conflict could do to inflation

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Jenee Tibshraeny: NZ Herald Wellington business editor on what the Middle East conflict could do to inflation · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talk SEDB. Follow
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• 0:16
  Speaker 2: Genetib Trainey The Herald's Wellington Business editors with us Alo Jenney.
• 0:21
  Speaker 1: Hi, Heather.
• 0:22
  Speaker 2: All right, so you were at the Reserve Bank announcement today.
• 0:24
  Speaker 2: What did you make of it?
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  Speaker 3: I was. I think the Reserve Bank, you know, delivered
• 0:32
  Speaker 3: a good clear statement. It was pretty balanced and to
• 0:36
  Speaker 3: a large extent, the governor repeated what she said in
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  Speaker 3: a speech a couple of weeks ago. So I think
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  Speaker 3: it's good. She's keeping the messaging consistent and clear and
• 0:46
  Speaker 3: in line with expectations. So the big takeaway rarely is
• 0:50
  Speaker 3: that you know, for now the Reserve Bank is watching
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  Speaker 3: and waiting. But if it's seas, inflation start to become embedded,
• 0:56
  Speaker 3: So businesses start to really lift prices in response to
• 1:00
  Speaker 3: higher fuel costs, and also employees start to demand higher wages.
• 1:06
  Speaker 3: Those things see higher prices become embedded. If that happens,
• 1:10
  Speaker 3: inflation might rise above the target range in the medium term.
• 1:15
  Speaker 3: Medium term is the key phrase there, and in that instance,
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  Speaker 3: the Reserve Bank would hike the ocr sooner than would
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  Speaker 3: otherwise have been the case. So the market reckons the
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  Speaker 3: OCR could go up in September, but the Reserve Bank
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  Speaker 3: has said that, you know, while it's balanced and all
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  Speaker 3: that type of thing, it is ready to act decisively.
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  Speaker 3: It's quite a strong word in Reserve Bank speech. Act
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  Speaker 3: decisively and in a timely way. Should it become really
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  Speaker 3: worried about inflation, do you reckon decisively?
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  Speaker 2: Is the word that led people to think it was
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  Speaker 2: a bit more hawkish in last time.
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  Speaker 3: I think, so there are a couple of sentences in
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  Speaker 3: the statement. People really do read into these things quite
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  Speaker 3: you know, with a fine sort of with a magnifying glass,
• 2:01
  Speaker 3: and they, you know, the economists and the markets did
• 2:06
  Speaker 3: see it to be slightly hawkish. So for example, to
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  Speaker 3: the two year swap rate that went up by about
• 2:14
  Speaker 3: seven basis points, so that's a bit of a change.
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  Speaker 3: The response, though was not such that I would expect
• 2:24
  Speaker 3: to see mortgage and term deposit rate changes. So listeners
• 2:29
  Speaker 3: will recall that, you know, in recent times we've seen
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  Speaker 3: markets move quite dramatically after Reserve Bank OCR reviews. That
• 2:40
  Speaker 3: hasn't happened this time. So, you know, even though people
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  Speaker 3: are saying that the statement is a bit hawkish, I
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  Speaker 3: wouldn't expect to see mortgage rates or term deposit rates
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  Speaker 3: changed too much in the short term.
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  Speaker 2: So, yeah, what is your take on Anna Bremen? Because
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  Speaker 2: the reason I'm asking this is because I get a
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  Speaker 2: text every time she comes on the show. I get
• 3:00
  Speaker 2: a text from a really, really well regarded business woman
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  Speaker 2: in Auckland who just like firsts for more Anna Bremen
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  Speaker 2: because she's calming. So I got this text. Ana Bremen
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  Speaker 2: is like a cooling ice pack in a world that's overheating.
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  Speaker 2: Is that the vibe you're getting?
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  Speaker 3: Yeah, that's great.
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  Speaker 2: I think you don't know, do you? I guess what
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  Speaker 2: I'm saying.
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  Speaker 3: It's a nice text.
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  Speaker 2: No, but I think what I'm saying, like, quite seriously,
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  Speaker 2: it was quite combative, and I don't we don't need
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  Speaker 2: to relitigate the Adrian all years. But it was quite
• 3:34
  Speaker 2: combative and a bit a bit wild, wasn't it. There
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  Speaker 2: is something about her demeanor that also seems calming, isn't it?
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  Speaker 2: Like that's got to that's got to be a factor.
• 3:44
  Speaker 3: It is calming. I think the consistency of the message
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  Speaker 3: is the key thing, as well as the presentation of
• 3:50
  Speaker 3: the message, because it's consistent and it's simple and it's
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  Speaker 3: consistent with the speech. So there have been numerous times
• 3:57
  Speaker 3: in the past where I've left one of these press
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  Speaker 3: conferences scratching my head, talking to other journalists going, oh,
• 4:02
  Speaker 3: what did they mean? Was that dubvish? Was that hawkish?
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  Speaker 3: Did they mean to say that? Was that misspeaking? Was
• 4:06
  Speaker 3: that the true intent? Where is? I think there's a
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  Speaker 3: little room for questioning with the governor, so that's that's
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  Speaker 3: a real positive. But you know, I don't admire their
• 4:16
  Speaker 3: job right now, and I must say that the outlook
• 4:20
  Speaker 3: does feel pretty bleak because the Reserve Bank is suggesting
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  Speaker 3: that even if inflation does become embedded and it has
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  Speaker 3: to lift the OCR, the thing that might stop it
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  Speaker 3: from lifting the OCR by a lot is the fact
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  Speaker 3: that the economy is likely to be sluggish. So you know,
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  Speaker 3: the thing that could restrict drastic interest rate hikes is
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  Speaker 3: sluggish economy. So I'm just looking at that going wow,
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  Speaker 3: things are not looking great on either side.
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  Speaker 2: Really, Gene, thank you as always for tolerating the weird
• 4:50
  Speaker 2: stuff that I send your way, which is it does
• 4:52
  Speaker 2: appear to be quite frequent. Gene tib Chraney The Herald,
• 4:55
  Speaker 2: Wellington Business.
• 4:55
  Speaker 1: Editor for more from news talks that'd be listen live
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