Dare we dream of a soft landing?
Recent forecasts from The Treasury point towards New Zealand avoiding a technical recession and getting on top of inflation before the end of 2024. The Reserve Bank’s forecasts still see a recession, but a relatively mild one, with inflation also getting back within the 1-3%pa target band by the end...
Have mortgage rates peaked or not?
Since late 2022, we’ve been predicting that mortgage rates would peak at over 7% this year based on our outlook for wholesale interest rates. But since the start of 2023, mortgage rates have generally tracked sideways or downward. Why are financial markets seemingly resistant to the Reserve Bank’s efforts to quell inflation by weakening demand through tighter monetary conditions?
Which industries will bear the brunt of a retail downturn?
The announcement in late May 2023 by the Reserve Bank of one final 25 basis point hike to the official cash rate (OCR) signalled that it felt it has done enough to cool demand and bring inflation pressures under control. Indeed, the Bank forecasts inflation to moderate to below 5%pa by the end of 20...