Latest / Best of Business / Katlyn Parker: Milford Asset Management expert on the economic impact of years of high interest rates

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Katlyn Parker: Milford Asset Management expert on the economic impact of years of high interest rates · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks. It'd be
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  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.
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  Speaker 2: Now let's go to Caitlin Parker of Milford Essett Management.
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  Speaker 2: Hey Kitlin, Hey Brian, Okay, I'm very well, thank you. Now,
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  Speaker 2: we've got almost three years of high interest rates. Are
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  Speaker 2: we starting to see an acknowledgment do you think from
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  Speaker 2: the Reserve Bank of the damage that this is causing
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  Speaker 2: the economy?
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  Speaker 3: Yeah, looks preasingly we are. So for the first time
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  Speaker 3: this cycle, today the ORBAN zed they signal their intent
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  Speaker 3: to create in the statement, and that was definitely a
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  Speaker 3: pleasant surprise for the market because going in, you know,
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  Speaker 3: most of us we did expect that the statement was
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  Speaker 3: going to be pretty neutral and the ORB and Z
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  Speaker 3: we're going to actually say very little. And the market
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  Speaker 3: had been expecting the orbnved too spec quitting rate later
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  Speaker 3: this year, but no one is really expecting them to
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  Speaker 3: admit to this today as such, and they will and
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  Speaker 3: truly did let the cat out of the bag that
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  Speaker 3: they are thinking about interest rightcut. So this was a
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  Speaker 3: definite shift and some of the key points I suppose
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  Speaker 3: for me was really the confidence that the orbitan set
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  Speaker 3: have I mentioned it, I think twice in the statement,
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  Speaker 3: but they are confident that inflation will go back to
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  Speaker 3: their one to three percent target in the next six months.
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  Speaker 3: And also the Urbitan said they did discuss that this
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  Speaker 3: height monetary policy, these high interest rates, that they're feeding
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  Speaker 3: through to domestic demand more strongly than they expected, but
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  Speaker 3: very positively. There was no mention of any or any
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  Speaker 3: talk of another out or hike in the statement today
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  Speaker 3: versus earlier in the year when they tried to elude
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  Speaker 3: and come into the market that potentially they would hike
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  Speaker 3: again if inflection remained for a bust.
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  Speaker 2: Yeah, So what was the market reaction to the Reserve
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  Speaker 2: Bank today?
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  Speaker 3: Look, so market was expecting them to start cutting later
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  Speaker 3: this year, and now they're expecting a larger quantum of
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  Speaker 3: cuts and at a faster pace. So now putting about
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  Speaker 3: a sixty percent probability that the ORBITANZ will start cutting
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  Speaker 3: in August versus later in the year. So we thought
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  Speaker 3: interest rates putting lower immediately on the back of that
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  Speaker 3: statement being released. So the two year interest rate, which
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  Speaker 3: is an input into mortgage right that was down abo
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  Speaker 3: zero point two percent. Currency was also weaker and share
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  Speaker 3: market rallied on the back of it a bit, so
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  Speaker 3: it was received very well by the market, and I
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  Speaker 3: would imagine that these moves will be somewhat extent that
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  Speaker 3: the offshore markets come in and get involved overnight. So
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  Speaker 3: the orbian dead. They weren't being well aware of what
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  Speaker 3: this statement would have done and the market reaction that
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  Speaker 3: would have been received and the market starting to price
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  Speaker 3: the work. But so it won't be surprised that Orbion
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  Speaker 3: debt how head markets have reacted.
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  Speaker 2: Kaitlin, always good to talk to you. Thank you so
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  Speaker 2: much for the expertise. It's Kaitlyn Paker of Mills Fedesset Management.
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