Shane Solly: Harbour Asset Management on the US Federal Reserve hinting at rate cuts

US Federal Reserve chair Jerome Powell has indicated rate cuts could be on the cards soon.

Powell indicated the tariffs were making an inflationary impact, but he explained the impact could still be temporary.

Harbour Asset Management's Shane Solly explained further.

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Episode Transcript

Speaker 1 (00:00):
Shane Soley, harbor Asset Management is with us now, Hey Shane,
Hello Heather. Okay, So the US Fed governor has opened
the door to the rate cats did this on Friday.
How did the markets react? Well? He said he was
speaking at this big jam baroo for economists and politicians
called Jackson Hole. It was more dubbish. So he opened
the door up for cuts in September, but he's not

(00:21):
pre committing. The key change for markets was he's not
just first to keep focusing on inflation. He's also talking
about labor markets and there have been a week. He
also talked about terraces and suggested that maybe it's less
of an inflation rist than the previously talked about. But
he's going to wait for some data here that is
coming up this week on Friday and news on Time

(00:42):
what's called the Core Personal Expenditure measure that's out on Friday,
and then in August he's got the August unemployment data
out middle of the month next month. I should say
that'll be important to him pushing the button on go.
In September, markets liked it. We saw the uish market
up one and a half percent. UIs bond yields this

(01:03):
interest costs went down, UIs dollar went down as well.
Not much of a pass through here, we're our shearmaker
here today was about zero point three percent, but helpful.
So yeah, we've got an opening up of the taps.
Did you see that retail sales data out today? Yeah,
it was a surprise, you know, with the marketing been
expecting a negative number. It actually came out positive, up

(01:23):
zero point five percent for that quarter to June. And
even if if we take out automotive, which can be
quite lumpy, it was up zero point seven percent. So
we've got a bit of growth out there in retail.
But either we just sort of look make the observation
that retailers have been doing a lot of deals to
simulate activity. Everybody knows that qui's love a bargain and

(01:43):
retailers have been working hard to do that. So just
to pinch your salt there, But nonetheless, it does suggest
that we've seen the bottom of the New Zealand economy. Yeah,
how good please to hear that. Now, what did you
make of today's company results? Yeah? Actually pretty solid scales.
Was this is the New Zealand Horticulture and supply chain company.
There was the best result on the day. Shap price
is up three percent Courus. That obviously brings our broadband

(02:06):
into our many of our homes. Stock price up two percent,
mainly because it went into an Australian ar market index
lines company Victor These ship price up two percent up.
The company delivered a really good result and some positive
dividend guidance and that's your property owned a property for
industry A share prices up one and a half percent,
good solid result, talk about more development. Share price of

(02:28):
recreational vehicle. We're into company tourism holdings that was flat
on the day, even though the company management team we're
talking about, hey, I thinks are getting bit better out there.
We're seeing some improving rental demand. And finally steal on
Tube share price down just over four percent, a pretty
weak result from them really highlighting what's been a very
tough design economy. And so what do you make of
how things have gone in this reporting season so far

(02:48):
for us? Yeah, it's actually been better. We've actually seen
better in that there's less negatives. That's a bit of
a double many there, but we're seeing less negatives come
are heading expectations and a lot of that's about costs
come in better and expected revenue is still a bit choppy,
but costs are coming in, and then the outlook statements

(03:09):
they're pro It's still cautious, but not as cautious as
there have been so generally better. Good stuff. Hey, Shane,
always good to talk to you. Thanks, we'll talk to
you next week. That Shane solely harbor Asset Management. For
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