Latest / Best of Business / Shane Solly: Harbour Asset Management spokesperson on whether the US Federal Reserve will cut rates

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Shane Solly: Harbour Asset Management spokesperson on whether the US Federal Reserve will cut rates · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks be follow
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  Speaker 2: And welcome to the program. First time I've spoken to
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  Speaker 2: Shane Solely from Harvard Asset Management. Hello, Shane, Hey Andrew here,
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  Speaker 2: you going very good. We've got some inflation data data.
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  Speaker 2: We've got some inflation data out from the United States
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  Speaker 2: of America and it's looking promising. And could that mean
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  Speaker 2: a rate cut by the Fed?
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  Speaker 3: Yeah, it is. It is data data, whatever you want
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  Speaker 3: to call it. And we saw a personal consumption experience.
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  Speaker 3: This is the key mesia that the Central Bank and
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  Speaker 3: the US of Digital Reserve focuses on. It came in
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  Speaker 3: zero point two percent for during two point six percent
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  Speaker 3: for the year, and it just means that the US
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  Speaker 3: is on track to hit the fence inflation target. They've
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  Speaker 3: got a meeting on Tuesday to discuss whether they're going
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  Speaker 3: to cut rates or not. And certainly markets don't think
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  Speaker 3: they would do it this time, but they'll start using
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  Speaker 3: language it's more softer about reflecting the full and inflation
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  Speaker 3: and labor markets. And so there's a lot of thinking
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  Speaker 3: about as the captain September or there's a later and
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  Speaker 3: Sumi markets have got quite a lot price. Then if
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  Speaker 3: they do start cutting, there's a long way to go
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  Speaker 3: back to sort of four percent by June twenty five,
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  Speaker 3: so more than one and a quarter percent. And of
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  Speaker 3: course that's helpful for our part of the world as well.
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  Speaker 3: Whereas our long term government bonders interest rates ten to
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  Speaker 3: refer back to that US rate.
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  Speaker 2: Do we want lower rates?
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  Speaker 3: Do we want?
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  Speaker 2: You know what I mean? Because during COVID we had
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  Speaker 2: everyone was going, God, God, do it, go go and
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  Speaker 2: this they're giving the money away. It's free money, and
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  Speaker 2: that can actually distort an economy just as much as
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  Speaker 2: expensive money.
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  Speaker 3: You're right, yeah, and there's no such thing as as
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  Speaker 3: three rates. But you're right though abnormally low and it
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  Speaker 3: created some abnormal outcomes. And that's the price we're paying
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  Speaker 3: right now, Andrew. And that's why we've got central bank
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  Speaker 3: rates back to above average. Long run this is still
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  Speaker 3: above average, and so we would expect them to settle
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  Speaker 3: somewhere a little bit lower, but I unlikely see them
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  Speaker 3: to go back to the COVID lows unless we do
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  Speaker 3: actually have a disaster like COVID.
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  Speaker 2: Or war or something like that. But there we go.
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  Speaker 2: Is it is, by the way, it is data because
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  Speaker 2: I checked this apparently data data was the americanization. Data
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  Speaker 2: is what routers say is and I'm trying to train
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  Speaker 2: myself to say data. So let's talk about New Zealand
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  Speaker 2: economic data, which continue to be weaker than we thought.
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  Speaker 3: Yeah, anyone's got the string of weaker data confirmed again
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  Speaker 3: with another piece today, which is a data point that's
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  Speaker 3: not looked at very often. It's filled jobs employment, and
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  Speaker 3: that's a bit of an indicator about whether the employment
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  Speaker 3: growth is stepping up or down. And unfortunately we was
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  Speaker 3: down zero point six percent for the gink quarter, and
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  Speaker 3: that means the unemployment that I may actually get above
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  Speaker 3: five percent in the Reserve bank. That's again when to
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  Speaker 3: give that sitting policy. They're thinking it's going to be
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  Speaker 3: around as a four and a half four point six percent,
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  Speaker 3: so unemployment will be higher, means there's more capacity in
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  Speaker 3: economy taking some of the infla should push it down.
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  Speaker 3: We all know it, we can see it in the street.
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  Speaker 3: But there's a question about central bank policy works as
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  Speaker 3: a lag takes time to work, and so we're all
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  Speaker 3: thinking about when does the reserve bankings down cut rates,
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  Speaker 3: do they go in August or in fact, do they
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  Speaker 3: go a little bit later as some of those non
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  Speaker 3: trable inflation peaks. So it's kind of wind rather than if.
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  Speaker 3: And certainly our economy is a week in quite fast.
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  Speaker 3: And I know mister Nicolaie wallis making some comments this
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  Speaker 3: afternoon saying, there you are reserve bank, You've got what
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  Speaker 3: you need.
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  Speaker 2: Yes, But she wouldn't quite say that with me because
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  Speaker 2: she's got She said, I've got to stay in my
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  Speaker 2: own lane. But you know it's a wink wink and
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  Speaker 2: a nudge nudge there.
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  Speaker 3: It's important central bank that's independent, the reason people trust us.
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  Speaker 2: Yeah, but go on, honestly, wink wink, nudge, nudge. Now
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  Speaker 2: it's not just Kimi Raw that has problems with boats,
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  Speaker 2: because Fletcher Building had a problem with a cement bulk
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  Speaker 2: Ceman carriership as well, and now they're building. Their whole
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  Speaker 2: share price is down. I've had another further earnings down.
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  Speaker 2: Greg's what's gone wrong there?
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  Speaker 3: Yeah, really unfortunate for Fletcher Building ship. I was down
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  Speaker 3: out of the five point seven percent today ten three
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  Speaker 3: dollars thirteen. And indeed they've command given a profit guidance
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  Speaker 3: warning of a ten to thirty million dollar hits from
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  Speaker 3: the disruption with the vessel the cement carrier having to
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  Speaker 3: be a year out of the next two to four months,
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  Speaker 3: and that ten to thirty men is about a four
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  Speaker 3: percent cut to earning spot Bus relative to what the
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  Speaker 3: market had expected. It's really unfortunate for Fletcher Building mainly
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  Speaker 3: have a modest impact for the New Zealand building. It
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  Speaker 3: is through. There are ways around this. They can truck,
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  Speaker 3: they can use containerized shipping to get that cement to
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  Speaker 3: where it needs to be, or they can actually do
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  Speaker 3: contracts with third party cement supplies such as Wholesome. So yep,
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  Speaker 3: a bit of a hit for Fletcher Building. They just
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  Speaker 3: can't catch a break of the month and this is
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  Speaker 3: just another cack good.
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  Speaker 2: On your shame. Sally, thank you so much and Shan
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  Speaker 2: comes to us from harberd Asset Management.
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