Latest / Early Edition with Ryan Bridge / Nick Tuffley: ASB Chief Economist on the Reserve Bank's decision to hold the OCR at 2.25%

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Nick Tuffley: ASB Chief Economist on the Reserve Bank's decision to hold the OCR at 2.25% · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Let's talk. Oh cr two point two five percent. Everyone
• 0:02
  Speaker 1: said that they wouldn't change. It didn't change, but the
• 0:05
  Speaker 1: committee was split. So Governor Arna Breman makes a captain's call,
• 0:08
  Speaker 1: holds it. Nick Tuffley, ASP, Chief Economists, Nick, Nice to
• 0:11
  Speaker 1: have you on the show.
• 0:12
  Speaker 2: Good morning, Hi there. Surprised how close it was, Yes,
• 0:17
  Speaker 2: we were. We did think that the Reserve Bank would
• 0:20
  Speaker 2: be getting closer to hiking rates, and that they would
• 0:25
  Speaker 2: lift rates in July. But yeah, right down to the
• 0:28
  Speaker 2: wire three verses three in a sense, and because the
• 0:32
  Speaker 2: governor chairs it, who accounts twice.
• 0:35
  Speaker 1: They've got predictions in there. I think we're at four
• 0:39
  Speaker 1: point nine percent the average mortgage interest rates at the moment,
• 0:42
  Speaker 1: going up to five point three five point four percent.
• 0:44
  Speaker 1: I mean, once they start talking in the way that
• 0:46
  Speaker 1: Arna Bremen was talking yesterday. If you've got a mortgage,
• 0:49
  Speaker 1: mortgages are going up anyway, aren't they?
• 0:52
  Speaker 2: If they have been since late last year when it
• 0:54
  Speaker 2: was getting clear that the Reserve Bank wasn't going to
• 0:57
  Speaker 2: cut any further and that the next move would be
• 1:00
  Speaker 2: up at some point. So you have seen people fixing
• 1:04
  Speaker 2: at rates that are higher than what we had last year,
• 1:07
  Speaker 2: and that's continued into this year, So that sort of
• 1:09
  Speaker 2: average that people are paying across across the boards are
• 1:12
  Speaker 2: going from four point nine to five point three. It's
• 1:14
  Speaker 2: not too dramatic, but the impacts of that will will
• 1:17
  Speaker 2: come through slightly over time. But yes, your window for
• 1:21
  Speaker 2: a lot of mortgage, you know, that sort of really
• 1:23
  Speaker 2: did slamshut late last year, and unfortunately we're seeing we've
• 1:28
  Speaker 2: already seen rates at a climb to some degree, and
• 1:30
  Speaker 2: that will continue.
• 1:31
  Speaker 1: Nick, do you find it interesting that the split was
• 1:33
  Speaker 1: along internal versus external lines?
• 1:37
  Speaker 2: Yeah, Look, it was fascinating and it's probably not too
• 1:40
  Speaker 2: surprising to see all the internal Reserve Bank staff of
• 1:43
  Speaker 2: a similar view because they were all working together preparing
• 1:46
  Speaker 2: the view together, but having all the external sort of
• 1:49
  Speaker 2: lined up was quite surprising because they are from different
• 1:52
  Speaker 2: different backgrounds. You do have one professor, profounding guy who
• 1:58
  Speaker 2: did some research that did suggest you should be lifting
• 2:00
  Speaker 2: interest rates sooner rather than later, so that wasn't a surprise.
• 2:04
  Speaker 2: But some of the other members externally, they could well
• 2:08
  Speaker 2: have had a very different view.
• 2:10
  Speaker 1: Does it tell you that there might be that there
• 2:12
  Speaker 1: is a bit of group think that goes on in
• 2:13
  Speaker 1: committees situations like this.
• 2:17
  Speaker 2: Well, you potentially will get that with the internal staff
• 2:21
  Speaker 2: if they all work together preparing, the preparing the forecasts
• 2:24
  Speaker 2: and the view. So I'm not too surprised at that,
• 2:27
  Speaker 2: but it was that was the surprise the external members.
• 2:32
  Speaker 2: And look, you have one member who's got a rural background.
• 2:35
  Speaker 2: You know, you might think that they are a lot
• 2:36
  Speaker 2: more focused on what's happening on the ground, although the
• 2:40
  Speaker 2: dairy sector is doing very well in one sort of
• 2:42
  Speaker 2: more market and regulatory focused economist looking at it and
• 2:46
  Speaker 2: all different backgrounds, but they all lined up and said
• 2:48
  Speaker 2: lot rates should go up, which you know you almost
• 2:51
  Speaker 2: expect it to be the other way around. The internal
• 2:53
  Speaker 2: staff saying, lock, we need to put rates up. Inflation
• 2:55
  Speaker 2: is going to be an issue, and external people going,
• 2:59
  Speaker 2: I'll hang on call you. Jet's a little bit now.
• 3:01
  Speaker 1: One hundred percent. Nick good TV on the show is
• 3:03
  Speaker 1: always Nick Tuffley, a Speed chief economist. For more from
• 3:06
  Speaker 1: Early Edition with Ryan Bridge, listen live to News Talks
• 3:09
  Speaker 1: it B from five am weekdays, or follow the podcast
• 3:13
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