Latest / Best of Business / Remy Morgan: Milford Asset Management expert on the Reserve Bank slashing the OCR by 25 basis points

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Remy Morgan: Milford Asset Management expert on the Reserve Bank slashing the OCR by 25 basis points · Best of Business

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  Speaker 2: The NZX finished down zero point seven for the day,
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  Speaker 2: the A six two hundred currently down one point eight,
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  Speaker 2: and the Reserve Bank today cut the official cash right
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  Speaker 2: twenty five basis points. We're now down to three and
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  Speaker 2: a half. Remy Morgan's Milfit Asset Management with us tonight, Remy,
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  Speaker 2: good evening, Hi, Ryan. Very much in line with expectations,
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  Speaker 2: this cut, isn't it.
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  Speaker 3: Yeah, So today's OCR decision, as you say, was very
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  Speaker 3: much expected by the market, with twenty five basis points
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  Speaker 3: fully priced in in the minutes today, there was nothing
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  Speaker 3: to suggest that they considered a smaller or larger cut
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  Speaker 3: at this point in time. But what we have seen
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  Speaker 3: over the last few days leading into today's decision was
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  Speaker 3: a shift to the market pricing three further cuts from
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  Speaker 3: here rather than two previously. And that's largely been in
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  Speaker 3: response to the tariff announcement last week and market concerns
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  Speaker 3: on global growth.
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  Speaker 2: Yeah, and those cuts taking the the market prediction to
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  Speaker 2: lower than it was at three point one, down to
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  Speaker 2: two point seventy five. I think what about the Reserve Bank.
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  Speaker 2: Do they consider the tariff policies? Did they mention that
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  Speaker 2: in their note?
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  Speaker 3: Yeah, so there's still quite a lot of uncertainty over
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  Speaker 3: what might actually happen, and this is why the RBNZAI
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  Speaker 3: didn't really deviate from expectation today. But what most of
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  Speaker 3: the committee did consider is that these trade policies do
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  Speaker 3: have the potential to move New Zealand inflation lower over
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  Speaker 3: the medium term. So what they mentioned in the minutes
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  Speaker 3: is that as the picture becomes more clear, they do
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  Speaker 3: have the scope to respond as necessary.
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  Speaker 2: How could the trade terrorifts do you think impact the
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  Speaker 2: future decisions?
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  Speaker 3: Yeah, so if there is a risk of lower inflation,
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  Speaker 3: the RBNZI couldn't look to further reduce the OCR So
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  Speaker 3: that could mean a faster pace of cuts or potentially
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  Speaker 3: a lower CACHE rate at the end of the year.
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  Speaker 3: But again this is really going to depend on several
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  Speaker 3: factors and how they play out over the coming weeks.
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  Speaker 2: Will the RB and Z watch RB and z'd be
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  Speaker 2: watching closely.
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  Speaker 3: Yeah, So, first and foremost, any negotiations, revisions or responses
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  Speaker 3: to trade policies in the coming weeks, and then from
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  Speaker 3: there the RB and ZE all need to look at
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  Speaker 3: the impact on our key trading partners, our currency, and
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  Speaker 3: then the flow through to our domestic economy and inflation.
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  Speaker 2: Remy, thank you for that up that great to have
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  Speaker 2: you on as always, Remy Morgan Milfinaesset Management.
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