The Weekly Overview is written by Tony Alexander. The views expressed are my own and do not purport to represent the views of the BNZ.
Tony Alexanders Comments - This Is Worse/This Is Not Worse
The week has been a tumultuous one and there is little point wasting space and your time here by iterating the percentage losses then gains on various sharemarkets, sharp currency changes etc. as such things have been all over the news for days. So lets take such knowledge as given and instead do what we macroeconomists try to be good at – seeing the bigger picture overlaying the volatility. Read more »
Is Our Economy Getting Better or Worse?
This week we have seen vehicle registrations data showing things flat to negative in July, a completely flat jobs report for the June quarter, flat growth in consents issued for non-residential buildings, and still slightly falling consent issuance for new dwellings. Its hardly awe-inspiring stuff and it means that our economy is still not necessarily in safe territory and it will be interesting to see how the new turbulence overseas affects our sentiment. Read about it in our Confidence Survey on Monday. Read more »
Interest Rates: Growth vs. Economic Slack
Well that was that. For a brief period the combination of higher than expected inflation and firmish data led to a shifting in monetary policy tightening expectations to September from December, 30 point jumps in wholesale fixed borrowing costs, and the arrival therefore of a time for borrowers planning to fix this cycle to do so. But now things have more than completely reversed with world market turbulence quite clearly set to worsen global growth prospects and our willingness to spend, invest and hire in the short term. That means monetary policy tightening has been pushed back out again. Read more »
If I Were a Borrower What Would I Do?
The bulk of the immediate pressure for rises in fixed housing interest rates has evaporated as a result of the turmoil freshly gripping world markets leading to tumbling expectations for world growth and inflation and sharp falls in wholesale borrowing costs. And so for the third time since March 2009 my period of saying I would shift from a floating rate to a fixed rate has ended after only 2-3 weeks! Thank goodness I said I’d fix 50% and not the whole lot, and thank goodness that hardly anyone actually made the jump from floating to fixed because the cost of moving is/was simply too much. C’est la vie. Read more »
