Latest / Early Edition with Ryan Bridge / Nick Tuffley: ASB Chief Economist ahead of the final Official Cash Rate announcement of 2025

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Nick Tuffley: ASB Chief Economist ahead of the final Official Cash Rate announcement of 2025 · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: It's a final ocr day for the year. Economists expecting
• 0:03
  Speaker 1: the reserve banks cut by twenty five basis points to
• 0:05
  Speaker 1: two point twenty five, leaving the door open for further
• 0:09
  Speaker 1: easing if the economy continues to stumble. Nick toughly asbchev
• 0:12
  Speaker 1: economists with us this morning. Nick, Good morning, Good morning.
• 0:15
  Speaker 1: Do you know what regional councils do?
• 0:16
  Speaker 2: Nick, Well, I'm sure they sort of look after the
• 0:21
  Speaker 2: water and the environmental standards, but I don't know that
• 0:24
  Speaker 2: they do any oci decision.
• 0:26
  Speaker 1: No, they don't, And which is what you're here to
• 0:28
  Speaker 1: talk about. We're expecting a quarter point cut, a quarter
• 0:32
  Speaker 1: percent cutless that the today later today. What are we
• 0:35
  Speaker 1: expecting beyond that?
• 0:38
  Speaker 2: It's really going to be very much a focus on
• 0:41
  Speaker 2: what is the Reserve Bank judging is the likelihood that
• 0:44
  Speaker 2: it needs to cut further, and we expect it will
• 0:46
  Speaker 2: keep the door wide open to taking further action if
• 0:50
  Speaker 2: it needs to next year. So it's just got that
• 0:53
  Speaker 2: rock and a hard place at the moment where it
• 0:55
  Speaker 2: looks like the economy is starting to turn up, but
• 0:57
  Speaker 2: it's going to be away on holiday for three months
• 1:00
  Speaker 2: and it will be just wanting to use that period
• 1:02
  Speaker 2: to really gauge whether we are getting enough of a
• 1:05
  Speaker 2: recovery to come through to stop inflation calling too far
• 1:09
  Speaker 2: in the longer term?
• 1:10
  Speaker 1: Do you agree Nick with kvy Bank. They said that
• 1:12
  Speaker 1: we should have gone lower sooner and we're now basically
• 1:16
  Speaker 1: having to do a mop up job.
• 1:19
  Speaker 2: Look, there's a degree of that in the sense that
• 1:21
  Speaker 2: the Reserve Bank paused earlier on this year ended up
• 1:25
  Speaker 2: having to restart and even cut slightly more aggressively. But look,
• 1:29
  Speaker 2: it has been a challenging time because, let's face it,
• 1:31
  Speaker 2: inflation has been sticky, and the Reserve Bank was steering
• 1:35
  Speaker 2: inflation picking back up which it has to three percent,
• 1:38
  Speaker 2: and worrying that it may hold up there again with
• 1:40
  Speaker 2: those memories of seven percent inflation probably still steer it
• 1:44
  Speaker 2: into our brains a bit as well.
• 1:47
  Speaker 1: If you've got a mortgage, our longer term fixed rates
• 1:51
  Speaker 1: already bottoming out.
• 1:52
  Speaker 2: Do we think they are getting close to that? And
• 1:56
  Speaker 2: lot that's where I think the messages today are going
• 1:59
  Speaker 2: to be quite a call for that, because as long
• 2:01
  Speaker 2: as the Reserve Bank keeps the door open that it
• 2:03
  Speaker 2: could cut next year if it needs to, that's going
• 2:05
  Speaker 2: to help keep the the wholesale rates and the mortgage
• 2:08
  Speaker 2: rates two mortgage rates contained. You know, if they give
• 2:11
  Speaker 2: a signal say hey, look we think we've done the job.
• 2:13
  Speaker 2: You know, the's a rest that you do start to
• 2:15
  Speaker 2: see rates sort of pop pop back up a little bit.
• 2:17
  Speaker 2: So look, we're getting near the end of the declines
• 2:21
  Speaker 2: and mortgage rates, so sort of it's a time to
• 2:23
  Speaker 2: start sort of thinking about what the trade offs are
• 2:25
  Speaker 2: for people about you know, whether they do look to
• 2:28
  Speaker 2: fix longer or not, whether that's something that's in their interests.
• 2:32
  Speaker 1: Appreciate your time, Nick Tuffley, asb chief Economists, were expecting
• 2:35
  Speaker 1: that decision from the Reserve Bank south Tonoon.
• 2:37
  Speaker 2: For more from earlier edition with Ryan Bridge.
• 2:40
  Speaker 1: Listen live to news Talks. It'd be from five am weekdays,
• 2:43
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