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Ryan Bridge: What the OCR says about the state of our economy · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Remember just a few weeks ago John Key came out
• 0:02
  Speaker 1: and he said he wanted one hundred basis point cut
• 0:05
  Speaker 1: from the Reserve Bank. Well, they almost gave him what
• 0:09
  Speaker 1: he wanted yesterday. It's easy to be an armchair critic
• 0:12
  Speaker 1: of the boffins down at number two the terrorists. They
• 0:14
  Speaker 1: should have gone for fifty Club twenty five was too cautious.
• 0:18
  Speaker 1: But markets listen as much to the guff after the
• 0:21
  Speaker 1: big announcement as they do the actual announcement. And if
• 0:24
  Speaker 1: you need proof of that, already, retail banks have started
• 0:27
  Speaker 1: slashing mortgage rates, both variable and fixed. That's on top
• 0:30
  Speaker 1: of the cuts that they already made last week. Pricing
• 0:32
  Speaker 1: in the twenty five some of the big ones will
• 0:35
  Speaker 1: in the coming weeks, some say some economists picking get
• 0:38
  Speaker 1: down to four and a half on short term fixed.
• 0:41
  Speaker 1: Look how the currency markets reacted. These guys were surprised.
• 0:45
  Speaker 1: Coming out with what is essentially a triple shot to
• 0:48
  Speaker 1: two point five by Christmas is a strong signal to send.
• 0:53
  Speaker 1: It's easy to get caught up in the hysteria of
• 0:56
  Speaker 1: calls for double shot all at once, But the bank
• 1:00
  Speaker 1: have its cake and eat it. To eat it too,
• 1:02
  Speaker 1: get businesses and households spending without risking inflation which is
• 1:06
  Speaker 1: touching cloth on three percent. Yes, they do look through
• 1:10
  Speaker 1: near term inflation, but there's also heat in the provinces.
• 1:13
  Speaker 1: It's not all about Auckland. And remember the days of
• 1:16
  Speaker 1: Adrian Or where the Reserve Bank hiked the rate quick
• 1:20
  Speaker 1: as a sherper up Mount Everest before nose diving it
• 1:23
  Speaker 1: back down again. You can achieve the same outcome without
• 1:27
  Speaker 1: risking overcooking things again, repeating the same mistakes. It's only
• 1:32
  Speaker 1: six or so weeks till the next call. If they
• 1:35
  Speaker 1: do need more, they can do more. There's no doubt
• 1:39
  Speaker 1: we've had a quarter two recovery blip, but we've had
• 1:42
  Speaker 1: promising July manufacturing data. We've got improving services sector data
• 1:48
  Speaker 1: out last week. All of that stuff is happening. All
• 1:50
  Speaker 1: of that stuff is good and showing promise. The message
• 1:53
  Speaker 1: is clear. Though. We're not walking back to Everest camp.
• 1:57
  Speaker 1: We are walking back to Everest camp. Rather, we're not running.
• 2:00
  Speaker 1: We're not in a hurry, we're not sprinting. And given
• 2:03
  Speaker 1: the over and undercooking that went on under Or, that's
• 2:06
  Speaker 1: probably the right speed. So I'm with the four in
• 2:10
  Speaker 1: Club twenty five with a caveat for now. For more
• 2:14
  Speaker 1: from Early Edition with Ryan Bridge, listen live to news
• 2:17
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• 2:20
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