Can we fight RBNZ? Looking at the data this morning house prices and milk products, the cornerstones of New Zealand's economy, are running searingly hot. The Guv' seems to be caught flat footed if this is an indication of inflation.
House prices = capital item, not included in CPI.
Milk products - have a look at NZD vs USD before extrapolating into inflation.
RBNZ doesnt just look at inflation.
Putting up rates will increase the NZ$. Hurting the economy/growth/jobs.
The amount of money we need to print to keep in step with what the Fed is printing is crazy. Basically if the RBNZ wanted to push down rates they could print away.
It's not like QE causes inflation anyway
another day of nasdaq 100 getting a hiding dragging down the sp500 with it , due to rising bonds today. that rejection at 13300 setup the negative flow for the week.
the reflation trade still seems to be working trannies holding up with the dow
I have some reservations about using StatsNZs CPI as an inflation gauge.
I'll give you an example, with a little overview of many similar OECD countries:
- StatsNZ report that 28% of their index weight is attributed to "Housing and Household Utilities".
- The US Bureau of Labour Statistics report that "Shelter" and "Utilities" is 36.4% of their index weighting is attributed the same.
- In Canada that "Shelter" and "Utilities" figure is about 40.2% of their CPI index weighting.
- In the EuroZone (Household, Utilities and Communications) is 37.7% of their CPI index weighting.
A few years ago New Zealand published a series of shockingly under-target CPI results that just made no sense and sent me down the path of asking why are housing and utility costs would be so much lower in New Zealand than other OECD countries. My conclusion was that the methodology or implementation StatsNZ where using was likely very different to other OECD countries.
This sort of might partially signal why housing and utilities have been such high performing investments in New Zealand as well.
Rapidly advancing technology is inherently deflationary. Going to be near impossible for central banks to generate inflation even with their super low interest rates.
That's why we are all going to have a universal basic income within the next decade (fiscal policy).
USA already have it. They just call them "stimulus cheque's". and look- talk of inflation.
Last edited by Rawz; 04-03-2021 at 07:28 PM.
Reason: add more
The Fed did this in 2019 and markets sold off so much that they came out and basically said, ‘ah don’t worry we were just joking, and ramped up QE’. Lots more sugar to come. Treasury’s can’t handle interest rates going up- everyone will go bust
oil has had a big rise today but this what caused the sell - off
Stocks Turn Lower After Powell’s Comments
Nasdaq falls nearly 3%, bond yields rise as investors digest Fed chair’s comments
By Caitlin Ostroff and Gunjan Banerji
Updated March 4, 2021 2:07 pm ET
PRINT
TEXT
U.S. stocks dropped and Treasury prices tumbled as investors parsed comments from Federal Reserve Chairman Jerome Powell about the outlook for inflation and the central bank’s views on rising bond yields.
Originally Posted by Tomtom
Reply With Quote
Bookmarks