November 26, 2025 • 7 mins
CEO of Infometrics and economist Brad Olsen joins Nick Mills to talk about the latest cut to the Official Cash Rate.
He gives his thoughts on the state of the economy, and how it will effect Kiwis. He also discusses the bank reaction and liquidations.
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Speaker 1 (00:07):
You're listening to the Wellington Mornings podcast with Nick Mills
from News talks'd be.
Speaker 2 (00:12):
We're lucky enough to speak to Brad Olson, the CEO
and principal economists of Infometrix.
Speaker 3 (00:17):
Good morning, Brad, good morning.
Speaker 2 (00:19):
How are you.
Speaker 3 (00:20):
I'm well, I'm well. I mean things are starting to
look better. It's still we actually recovery, but a little
bit more support from the Reserve Bank of course being
an out. So look, you know, in terms of ways
to end the year, it still suggests that things are tough,
but again hoping for better things as we head through
to twenty twenty six.
Speaker 2 (00:41):
I mean, apart from the obvious that your interest rates
are dropping on your home mortgage and maybe some businesses
are getting their rates dropped. I mean, what how does
this change everybody every Kiwi's lives.
Speaker 3 (00:53):
Well, I think part of it is also the all
the talk that is now going on. You've heard from
the Reserve Bank governor yesterday sort of you know, standing
at the podium dream of press conference talking about some
of those small economic trends that are starting to see
that are showing a bit of a pick up. You
look at the likes of ours worked in the economy
(01:14):
that have improved, a little bit of an uptick in
the number of job ads and similar So part of
it is also around confidence. And I feel like, sort
of understandably we've had a bit of a crisis of
confidence this year in the economy because the recovery hasn't
been nearly as forthright or sort of as large and
quickly moving as we might have expected. And so with
(01:37):
all of this talk around how interest rates are dropping
and how there are better things coming through, part of
it is also that it just sends the signal to
people that things are coming. And probably the other big
one and I think that you know, a bit of
a double edged sword here, but when you drop interest rates,
not only do you make it effectively more affordable to borrow,
(01:59):
but you also make it less useful to save. And
the idea there is that, well, you know, if you're
sitting there tossing up, do I put some money into
savings or do I spend it? Generally speaking, there will
be a lower propensity, lower sort of need for people
to save immediately. They'll spend it instead because they or
they'll find it somewhere else to invest it, maybe into
(02:21):
a business or something. Because they're looking for a better return.
So all of those different channels coming together to support
a bit more economic activity as we head through to
the new year.
Speaker 2 (02:31):
That seems to me that whole idea, because I you know,
when you think about it. When I read the article yesterday,
it was about, you know, people thinking, well, it's no
good for people that want to actually put money in
the bank and save normally. In my humble opinion is
it's older people that have money in the bank and
younger people want to see a return on their investment.
Are we going to see people's younger people with the
(02:53):
money that they have got disposable investing into businesses, investing
in other ways?
Speaker 3 (02:59):
I think you will to a degree. I mean, if
you're a young person who's got I don't know, forty
years or so thirty five years until highman, and you're
looking at sort of where you're putting your money at
the moment, depending on your risk tolerance and everything else.
You know, the toss up between a term deposit and
maybe thinking about something in the stock market or a
(03:19):
private business or something. You know, the re terms can
be quite different. You're right in terms of the age difference,
you know, my grandmother often talks to me about term
deposits and what the latest rates are and more, because
that is part of her income. I mean, you know,
some of those rates term deposits and otherwise they're still solid,
(03:40):
but they're not We're near as good as a couple
of years ago. And I guess that's the where you
start to get. As interest rates come down, people have
got to make a slightly more formed decision. They've really
got to dig into the nuts and bolts and go
where do I want to put my cash? Whereas before
you just throw it into a really high earning or
high interest bearing term deposit and you sort of see
it and forget. Now you've got to do a little
(04:01):
bit more work to figure out what to do with
your money.
Speaker 2 (04:04):
I've got a couple of really quick questions for our listeners.
Do you reckon we're rock bottom? Do you reckon this
is low as and as hard as it's going to get.
Do you reckon we're on.
Speaker 3 (04:10):
Their way up? I'd definitely like to think so. I
think the middle of this year, that June quarter should
hopefully be the low point. We're expecting that we've hit
the peak of unemployment and that things should start to
improve from here, and probably most importantly you are seeing
some indications of that. You're seeing a lift in job
add numbers and similar which does I think suggest you're
starting to see a little bit of a pick up,
but it is going to be slow and quite bitsy.
Speaker 2 (04:33):
What about liquidations, Are we still going to see the
great huge numbers of liquidations?
Speaker 3 (04:38):
Oh? I think you probably will still see a few
were only because there's still a big hangover from you know,
the COVID period, and so I know there's a lot
of concern out there, particularly over how much you know,
i AD has been sort of going out there into
the market, and I guess the challenges is that you
also risk if you don't sort of see some action
from the government, the sort of contagion effect of businesses
(05:00):
who might not be able to currently pay their bills
to ID if they then start to impair businesses who
are a current going concern. Is a real sort of
worry around that. So look, you probably will see a
few more. Importantly, on an adjusted basis relative to the
number of businesses in the economy, liquidations still haven't got
anywhere near where they were in the GFC, So it's
(05:22):
a very very different time.
Speaker 2 (05:24):
My gutters is still a hell of a lot more
to come. But that's just that's just my personal gut
from talking to people on the street. Do you think
the banks could have done more or done things quicker?
Are they if they reacted quick enough and well enough.
Speaker 3 (05:38):
I mean, hindsight always means that you think you're a
genius on these decisions, and so I mean that one,
that one is tough. I guess, Look, there was a
little bit of caution in our minds around how much
we've seen actions sort of take a bit long to
come through. You look at the likes of COVID. We
dropped things, and there's a lot of stimulus in the economy,
and we kept that stimulus going for too long, which
(06:00):
meant that we then had to rack up rates even
higher it was now had to probably drop them lower
than we would have acted. My only caution there is
we've still got headline inflation at three percent even though
the economy is weak. And I really do worry that,
you know, these interest rates cuts we've seen in recent times,
they don't take full effect for a good eighteen twelve
(06:20):
to eighteen months sometimes, so I worry we get through
to next year, and as incredible as it might seem,
the economy is starting to pick up steam, we do
too much, We've got too much inflation, and the Reserve
Bank might have to overly lift interest rates to try
and even things out. That would be a very bad outcome.
But it's still a bit of a caution in our
minds that we might have again overdone just how much
support we're giving the economy, and then we'll overdo it
(06:43):
on the other side too.
Speaker 2 (06:43):
I'm going to give you the real life other side
of that from a man in the street is I
think we're still living the hangover of this really tough time.
And I think if your fridge is still going, you're
not going to go out and buy a new one,
because even though you've got more money in the bank
and things are better, you're still remembering the hard times.
Speaker 3 (07:01):
Yeah, totally right. And I mean, look, there's this real
sort of checking an egg situation. At the moment. You've
got households that you know they're legitimately getting they've got
more disposal incomes than before, their mortgage rates are lower,
but no one's immediately spending that money because they're still
worried about their job and going well. Look, yep, and
a lot of mortgage rates is easy to pay, but
(07:21):
not if I've got jobs all at the same time though, right,
you've got businesses going well. Look, I haven't got that
good of sales number coming in, so I'm not going
to go and hire anyone else until i see better
sales numbers, which one sort of gives first. And so
I think that's why you're seeing this, Like you say,
real reluctance to go and spend and everything. Everyone's farly
and understandably a bit shy after the last couple of.
Speaker 2 (07:43):
Years, four years, I'd say, Brad, Brad, it's always great
to talk to you. I know you're away on holiday,
so thanks for taking the time to let Wellentoni and
snow what's going on Brad Olson's CEO, Principal economists and
then for metrics.
Speaker 1 (07:55):
For more from Wellington Mornings with Nick Mills, listen live
to news talks There'd be Wellington from nine to am weekdays,
or follow the podcast on iHeartRadio.
You're listening to the Wellington Mornings podcast with Nick Mills
from News talks'd be.
Speaker 2 (00:12):
We're lucky enough to speak to Brad Olson, the CEO
and principal economists of Infometrix.
Speaker 3 (00:17):
Good morning, Brad, good morning.
Speaker 2 (00:19):
How are you.
Speaker 3 (00:20):
I'm well, I'm well. I mean things are starting to
look better. It's still we actually recovery, but a little
bit more support from the Reserve Bank of course being
an out. So look, you know, in terms of ways
to end the year, it still suggests that things are tough,
but again hoping for better things as we head through
to twenty twenty six.
Speaker 2 (00:41):
I mean, apart from the obvious that your interest rates
are dropping on your home mortgage and maybe some businesses
are getting their rates dropped. I mean, what how does
this change everybody every Kiwi's lives.
Speaker 3 (00:53):
Well, I think part of it is also the all
the talk that is now going on. You've heard from
the Reserve Bank governor yesterday sort of you know, standing
at the podium dream of press conference talking about some
of those small economic trends that are starting to see
that are showing a bit of a pick up. You
look at the likes of ours worked in the economy
(01:14):
that have improved, a little bit of an uptick in
the number of job ads and similar So part of
it is also around confidence. And I feel like, sort
of understandably we've had a bit of a crisis of
confidence this year in the economy because the recovery hasn't
been nearly as forthright or sort of as large and
quickly moving as we might have expected. And so with
(01:37):
all of this talk around how interest rates are dropping
and how there are better things coming through, part of
it is also that it just sends the signal to
people that things are coming. And probably the other big
one and I think that you know, a bit of
a double edged sword here, but when you drop interest rates,
not only do you make it effectively more affordable to borrow,
(01:59):
but you also make it less useful to save. And
the idea there is that, well, you know, if you're
sitting there tossing up, do I put some money into
savings or do I spend it? Generally speaking, there will
be a lower propensity, lower sort of need for people
to save immediately. They'll spend it instead because they or
they'll find it somewhere else to invest it, maybe into
(02:21):
a business or something. Because they're looking for a better return.
So all of those different channels coming together to support
a bit more economic activity as we head through to
the new year.
Speaker 2 (02:31):
That seems to me that whole idea, because I you know,
when you think about it. When I read the article yesterday,
it was about, you know, people thinking, well, it's no
good for people that want to actually put money in
the bank and save normally. In my humble opinion is
it's older people that have money in the bank and
younger people want to see a return on their investment.
Are we going to see people's younger people with the
(02:53):
money that they have got disposable investing into businesses, investing
in other ways?
Speaker 3 (02:59):
I think you will to a degree. I mean, if
you're a young person who's got I don't know, forty
years or so thirty five years until highman, and you're
looking at sort of where you're putting your money at
the moment, depending on your risk tolerance and everything else.
You know, the toss up between a term deposit and
maybe thinking about something in the stock market or a
(03:19):
private business or something. You know, the re terms can
be quite different. You're right in terms of the age difference,
you know, my grandmother often talks to me about term
deposits and what the latest rates are and more, because
that is part of her income. I mean, you know,
some of those rates term deposits and otherwise they're still solid,
(03:40):
but they're not We're near as good as a couple
of years ago. And I guess that's the where you
start to get. As interest rates come down, people have
got to make a slightly more formed decision. They've really
got to dig into the nuts and bolts and go
where do I want to put my cash? Whereas before
you just throw it into a really high earning or
high interest bearing term deposit and you sort of see
it and forget. Now you've got to do a little
(04:01):
bit more work to figure out what to do with
your money.
Speaker 2 (04:04):
I've got a couple of really quick questions for our listeners.
Do you reckon we're rock bottom? Do you reckon this
is low as and as hard as it's going to get.
Do you reckon we're on.
Speaker 3 (04:10):
Their way up? I'd definitely like to think so. I
think the middle of this year, that June quarter should
hopefully be the low point. We're expecting that we've hit
the peak of unemployment and that things should start to
improve from here, and probably most importantly you are seeing
some indications of that. You're seeing a lift in job
add numbers and similar which does I think suggest you're
starting to see a little bit of a pick up,
but it is going to be slow and quite bitsy.
Speaker 2 (04:33):
What about liquidations, Are we still going to see the
great huge numbers of liquidations?
Speaker 3 (04:38):
Oh? I think you probably will still see a few
were only because there's still a big hangover from you know,
the COVID period, and so I know there's a lot
of concern out there, particularly over how much you know,
i AD has been sort of going out there into
the market, and I guess the challenges is that you
also risk if you don't sort of see some action
from the government, the sort of contagion effect of businesses
(05:00):
who might not be able to currently pay their bills
to ID if they then start to impair businesses who
are a current going concern. Is a real sort of
worry around that. So look, you probably will see a
few more. Importantly, on an adjusted basis relative to the
number of businesses in the economy, liquidations still haven't got
anywhere near where they were in the GFC, So it's
(05:22):
a very very different time.
Speaker 2 (05:24):
My gutters is still a hell of a lot more
to come. But that's just that's just my personal gut
from talking to people on the street. Do you think
the banks could have done more or done things quicker?
Are they if they reacted quick enough and well enough.
Speaker 3 (05:38):
I mean, hindsight always means that you think you're a
genius on these decisions, and so I mean that one,
that one is tough. I guess, Look, there was a
little bit of caution in our minds around how much
we've seen actions sort of take a bit long to
come through. You look at the likes of COVID. We
dropped things, and there's a lot of stimulus in the economy,
and we kept that stimulus going for too long, which
(06:00):
meant that we then had to rack up rates even
higher it was now had to probably drop them lower
than we would have acted. My only caution there is
we've still got headline inflation at three percent even though
the economy is weak. And I really do worry that,
you know, these interest rates cuts we've seen in recent times,
they don't take full effect for a good eighteen twelve
(06:20):
to eighteen months sometimes, so I worry we get through
to next year, and as incredible as it might seem,
the economy is starting to pick up steam, we do
too much, We've got too much inflation, and the Reserve
Bank might have to overly lift interest rates to try
and even things out. That would be a very bad outcome.
But it's still a bit of a caution in our
minds that we might have again overdone just how much
support we're giving the economy, and then we'll overdo it
(06:43):
on the other side too.
Speaker 2 (06:43):
I'm going to give you the real life other side
of that from a man in the street is I
think we're still living the hangover of this really tough time.
And I think if your fridge is still going, you're
not going to go out and buy a new one,
because even though you've got more money in the bank
and things are better, you're still remembering the hard times.
Speaker 3 (07:01):
Yeah, totally right. And I mean, look, there's this real
sort of checking an egg situation. At the moment. You've
got households that you know they're legitimately getting they've got
more disposal incomes than before, their mortgage rates are lower,
but no one's immediately spending that money because they're still
worried about their job and going well. Look, yep, and
a lot of mortgage rates is easy to pay, but
(07:21):
not if I've got jobs all at the same time though, right,
you've got businesses going well. Look, I haven't got that
good of sales number coming in, so I'm not going
to go and hire anyone else until i see better
sales numbers, which one sort of gives first. And so
I think that's why you're seeing this, Like you say,
real reluctance to go and spend and everything. Everyone's farly
and understandably a bit shy after the last couple of.
Speaker 2 (07:43):
Years, four years, I'd say, Brad, Brad, it's always great
to talk to you. I know you're away on holiday,
so thanks for taking the time to let Wellentoni and
snow what's going on Brad Olson's CEO, Principal economists and
then for metrics.
Speaker 1 (07:55):
For more from Wellington Mornings with Nick Mills, listen live
to news talks There'd be Wellington from nine to am weekdays,
or follow the podcast on iHeartRadio.
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