ADRIAN ORR our NEW RBNZ GOVERNOR

[Logen Ninefingers]

Adrian Orr said that OCR increases were over, then he jammed his fingers tightly into his ears & shut his eyes. “I am not listening, I am not listening” he said.

Sorry Adrian, New Zealand doesn’t exist in a vacuum. What other, much larger nations do has an enormous bearing on us. The NZD must maintain its global purchasing power. The Federal Reserve and the ECB have important interest rate decisions to make this week. What they do will impact us.

Here at home, non-tradeable inflation barely moved last quarter -

‘Non-tradable inflation, a closely watched indicator of domestic price pressures, eased to 6.6% from 6.8% but was still higher than the RBNZ's projection of 6.3%’

‘Adrian has spoken.’ Yes, but so did King Canute, and the tide still came in.

[Aaron]

Confirmation bias at work. Daniel Lacalle does not appear to be a fringe loopy from a quick google search.

The article also explains why no political party in NZ is making current monetary policy an issue, mostly because it benefits them and also because no one else gives a s*it about it, so it is not a vote winner.

https://www.zerohedge.com/personal-f...ey-key-freedom

[Logen Ninefingers]

Confirmation bias at work. Daniel Lacalle does not appear to be a fringe loopy from a quick google search.

The article also explains why no political party in NZ is making current monetary policy an issue, mostly because it benefits them and also because no one else gives a s*it about it, so it is not a vote winner.

https://www.zerohedge.com/personal-f...ey-key-freedom

Well the Reserve Bank - like all central banks - is supposedly independent, so it would be difficult for any political party here to train its rhetorical guns on it even if they wanted it to. I don’t need Mr Lacalle to tell me that. The central bank has a target range of inflation in its mandate, and one lever to pull. A politician can hardly criticise them when they pull the lever to fulfil their mandate. (Though in Australia, politicians criticising the Reserve Bank does seem to be a thing).

As regarding the NZ population and its ignorance of risk, economics, the workings of central banks, the causes of inflation etc etc etc….ignorance may be bliss but it is also sad and pretty much inexcusable, imo.

Politicians in New Zealand may not criticise the Reserve Bank and its Governor, but I have no qualms about doing so.

[Logen Ninefingers]

Fed approves hike that takes interest rates to highest level in more than 22 years

WED, JUL 26 2023 2:00 PM EDT


‘The Federal Reserve approved a much-anticipated interest rate hike that takes benchmark borrowing costs to their highest level in more than 22 years.
The quarter percentage point increase will bring the fed funds rate to a target range of 5.25%-5.5%.
While policymakers indicated at the June meeting that two rate hikes are coming this year, markets are pricing in a better-than-even chance that there won't be any more moves this year.
Chair Jerome Powell said the central bank will make data-driven decisions on a "meeting-by-meeting" basis.’

[Logen Ninefingers]

As reported on Bloomberg -

‘The price of gasoline is starting to surge everywhere, an inflationary omen for central banks and governments the world over.

Futures just soared to a nine-month high in New York, sending shock waves through to the pump, while prices have also been rising in Asia. Markets for the motor fuel have tightened worldwide due to a combination of unexpected refinery outages plus lower-than-normal stockpiles in key storage hubs.’

[Logen Ninefingers]

Strong US economic data released today ‘shows an American economy powering ahead and likely to avoid a recession. "Soft-landing" optimism is everywhere. It basically validates the Fed's policy positioning, and certainly leave the door open to more rate hikes without excessive pain.’

———

‘Oil prices had already forgotten about Wednesday’s rate hike by Thursday morning, with WTI hitting $80 per barrel just before noon ET.

WTI was trading at $80 per barrel on Thursday morning at 11:52 a.m. ET, up $1.22 per barrel, or 1.54% on the day. Prices haven’t been this high since mid-April.‘

[Logen Ninefingers]

https://i.stuff.co.nz/business/13264...duty-cut-ended

‘It’s four weeks after the fuel tax excise duty cut came to an end and fuel prices have been relatively stable – but be warned, they’re about to climb again.‘

[winner69]

Good quote from Mauldin -

We talk frequently about the way central banks and governments affect the economy. In the grander scheme of things, though, whatever the Fed does is more like throwing a hand grenade into a large building. Yes, you’ll make some noise and cause some damage. People may be hurt. But the building won’t care, and the owner will fix it.

[Aaron]

Good quote from Mauldin -

We talk frequently about the way central banks and governments affect the economy. In the grander scheme of things, though, whatever the Fed does is more like throwing a hand grenade into a large building. Yes, you’ll make some noise and cause some damage. People may be hurt. But the building won’t care, and the owner will fix it.

Are you suggesting that the RBNZ only plays a "bit" part in the NZ housing market as Adrian has explained to us??

[winner69]

Are you suggesting that the RBNZ only plays a "bit" part in the NZ housing market as Adrian has explained to us??

Complicated world Aaron .that guy went on -

Economically, what really matters, in the long run, is Human Action, the kind Ludwig von Mises called “purposeful behavior.” We all make choices that reflect our backgrounds, experiences, and environments. These choices add up to form “the economy.” Adam Smith called it the Invisible Hand.

But these choices aren’t purely voluntary. We face external constraints, and not just from governments. As humans, we’re subject to time and space. Our choices reflect the era in which we live and the others who share it. This affects our choices and, thus, the kind of economy we collectively create. And it changes over time.