Interest Rates - Where to next?

[neopoleII]

i see we're posting sound bites now......
all it says is home affordabiltiy is improving....... thats a long way from affordable.
the ratio of afforability is still way off from long term averages.
we are still in masive debt, and unemployment is rising.

having said that, my brother is a partner in a civil enginereering/ surveying co and he has mentioned that subdivisons are moving again.....
so some folks are hoping for an early worm.
but that is just the typical property speculation syndrome that kiwis suffer from.

my bet is the govt will have to step in at some stage.

[The GrandMaster]

i see we're posting sound bites now......

"now"?

TGM

[POSSUM THE CAT]

How long before interest rates have to Increase. there will be a lot of money cross the Tasman until they do

[neopoleII]

i dont think floating interest rates will rise for quite a while.
what with the rising dollar affecting export incomes, and possibly jobs in the export sector.
and house prices are still high compared to incomes, this link states the median incomes for All nzers and then wage and salary earners......... the numbers are not pretty.


http://www.nzherald.co.nz/business/n...ectid=10602017

and then the tax working review group who have to find a way to reavaluate the tax system, they mention alot about investment property and the lack of tax income for the ird from it.
lots of hurdles to get through, but something will happen,
which when it does, should take the preasure of interest rates as well.

http://www.nzherald.co.nz/business/n...ectid=10601862

[POSSUM THE CAT]

NeopoleII I already have 65% of my wealth across the tasman and unless NZ interest rates hit at least 3% by Cristmas a lot more of it will be over there and if you are Japanese or Chinese or any other race are you going to accept 2.5% from NZ or 3.5% from Australia So who are you going to borrow money from. KIwis with money are sending it to Australia

[Aaron]

This is the most relevant thread I could find.

Do negative interest rates seem insane to anyone else. i.e. I will pay someone to use my money and the more they borrow the more interest they make.

Just reading this article has me worried.
http://www.smh.com.au/business/marke...20-gs6mpr.html

Is it being discussed seriously and will it happen?

I suppose borrowers might limit their borrowings based on the threat interest rates could turn positive again one day. What about lenders? I guess you sell bonds to central banks so that individuals saving gets taken out of the equation. It would have to as no-one would bother saving anymore. All positive for gold I suppose but if they went cashless then I think central banks would need to sell their gold reserves to prove it is no longer considered money.

[Valuegrowth]

Rate cut and maintaining negative interest rates have become new normal in some countries now. They want to see growth by managing interest rates. They have selected easy money policy option. My question is who will begin to raise rate first?

https://www.theguardian.com/business...lation-targets

The US central bank should look at options including negative rates and higher inflation targets to stimulate the economy

http://www.theweek.co.uk/brexit/6411...erest-rate-cut

Bank of England ditches second interest rate cut

https://www.bloomberg.com/news/artic...-again-in-2017

Prudential Sees Kuroda Taking Negative Rates Lower Again in 2017

http://qz.com/809970/inequality-is-r...-are-to-blame/

Inequality is rising in Denmark, and negative interest rates are to blame

[macduffy]

My question is who will begin to raise rate first?

Probably the US Fed. But the real issue isn't who will be first, it's more a matter of pretty much universal acceptance that the next move will be up.

[NeverQuestion]

Probably the US Fed. But the real issue isn't who will be first, it's more a matter of pretty much universal acceptance that the next move will be up.

For anyone who has not worked out the connection.. when the Fed rates rise then so too does the Mortgage rates in NZ...[and rents]

"Of course, when US interest rates go up our interest rates go up as well, so that's why our five year mortgage rates are rising, even though the Reserve Bank has its official cash rate on hold," Speizer said."

http://www.nzherald.co.nz/business/n...ectid=11766939

We are all in for a world of pain

[macduffy]

For anyone who has not worked out the connection.. when the Fed rates rise then so too does the Mortgage rates in NZ...[and rents]

"Of course, when US interest rates go up our interest rates go up as well, so that's why our five year mortgage rates are rising, even though the Reserve Bank has its official cash rate on hold," Speizer said."

http://www.nzherald.co.nz/business/n...ectid=11766939

We are all in for a world of pain

Not quite all! Some of us have paid off our mortgages - mostly financed at much higher rates than those current or prospective! - and will welcome slightly more realistic returns as deposit rates "adjust".