Reminds me of the time just before the GFC. Fixed for 12 months at 9% or 8% for longer term rates. Fortunately I went for 12 months because the rates dropped suddenly afterwards. I am not saying it will happen this time round. Things are too difficult to foresee and general randomness.
Inflation is still way above the target of 1 - 3%.
Why not the converse - RBNZ previously set such low interest rates that massively inflated the price of housing.in fact the inflation range target results in interest rates that over-inflate house prices, given long-standing NZ tax policies.
Reminds me of the time just before the GFC. Fixed for 12 months at 9% or 8% for longer term rates. Fortunately I went for 12 months because the rates dropped suddenly afterwards. I am not saying it will happen this time round. Things are too difficult to foresee and general randomness.
Yep & I just read, highest rates since 2008. Ominous.
Australia leave rates in check at 3.5%, we keep leading the world... down the wrong path.
Inflation has been driven by supply issues not over heated demand. Orr is misreading the situation completely & rate hikes aren't going to stop OPEC from cutting oil production or speed up supply of goods.
Higher interest rates isn't going to stop health workers fleeing for Australia, in fact probably drive more to leave tightening the labour market further.
He slashed rates to zero to avoid a pandemic induced recession, then creates his own recession, just as business is trying to recover.
I agree ...I think Mr Orr is trying to do which even FED is scared to do .... He is hell bent on causing massive pain and even then inflation will not die easily ...as almost 50% part is beyond rates control ...
Maybe big boost to benefits / super rates made him add extra 25bips ....it maybe rebalancing of wealth in his mind ....make middle class suffer and let poorer class have something more to spend to counter inflation ...seems logical if looked at it philosophically !!
1- I think it’s a case of what Orr should do versus what it looks like he will do
2- Recall Orr was late to start hiking rates. He’s been behind the curve from the beginning and backward looking in decision making.
3- the outlook for the economy (esp residential building) is bad enough Orr should now stop hiking rates.
4- but with a vision fixed on the rear vision mirror Orr will deliver a few more sizeable hikes. Orr will do overdo the hikes. Hence my suggestion that 6% is possible.
5- These decisions will make a recession inevitable (could be avoided as in 3 above)
6- even then it’s going to take 2-3 years to fix the underlying inflation ‘problem’ - esp if Orr gets fixated on his 1%-3% range
7- the market will lead the fall in interest rates, maybe that’s even started which is interesting.
things could change if Govt intervenes ….they’ve got him by shorts and curlies by keeping him on for another term.
Playing out as I thought it would
Shock and Orr seems a popular phrase today
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
banks and market starting to raise there terminal rate higher now 6% soon ?
recently centrix was saying 19k behind on mtge's. guess when the banks start jacking the mtge's up soon that be 19k mortgagee sales coming soon anyway guess orr is willing to sacrifice a few for the many in the long run
Originally Posted by bull....
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