Cameron Bagrie: Independent Economist on ANZ raising its interest rates after forecasting earlier than expected OCR hikes

The country's largest bank is again raising interest rates, days after forecasting much earlier-than-expected OCR hikes. 

ANZ is increasing most home loan rates by 10 to 20 basis points following a rise in wholesale rates. 

It's now advertising a one-year home loan rate of 4.69%. 

Independent economist Cameron Bagrie told Mike Hosking markets are pricing-in the change in forecasts. 

He says the fixed rates are based on what's expected to happen, rather than what's happening now. 

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Episode Transcript

Speaker 1 (00:00):
Interest rates topic de jure this week, really are dueling
forecast from the Bank of course, now moving to mortgage
money aims in lifting two year fixed by twenty points
the rest by ten term deposits. They're also up, which
I suppose is the good side. Have you got any money?
Cameron Bagri Independent Economists back with this morning Morning, Mike.
Is this as part of a broader movement up from everybody?

Speaker 2 (00:20):
Yeah, it is. Look, if you see what's called the
forward curve, or expectations of where the official cast rate
is going to be over the next one to three years,
markets have obviously repriced those expectations. There's a growing view
that the reserve banks be going to be hiking not
just once, potentially twice maybe three times in twenty twenty six.
So those fixed rates are reading expectation of what the

(00:42):
Reserve Bank's going to be doing tomorrow as opposed to
what the Reserve Bank is doing today, and those expectations
have reted it are those expectations retted up? You see
those fixed mortgages start to move in line.

Speaker 1 (00:53):
So two year fixed by twenty points, is that a
peak or is there more where that came from? And
if there is how much more.

Speaker 2 (01:00):
But I guess that's a meani dollar question in regard
to if anybody can give me a precise duration or
your timeline, and regard to when the situation of your
moves is going to settle down while the potential flowing
is beyond oil transport costs into other areas of inflation.
We can give you a bit of a precise prescription
in regard to whether the official cashtrate is likely to peak.

(01:21):
What we know at the moment is the official care
strates two point twenty five, which is what's called south
of neutral, which is where the Reserve Bank's neither got
the foot on the accelerator or the break. But I'm
trying to push the economy along. If you get this
sort of your supply shock, you probably want to have
that official cashtraight around neutral, which is around three percent.

Speaker 1 (01:40):
Yeah, so am z bang bang banging. We're done asb
slightly longer quey banks is it's all reckless. What do
you say?

Speaker 2 (01:49):
I favored? I guess the strategy of what's good. A
statch in time saves night. If it's the reserve bank,
I'll be going a little bit earlier as opposed to
going later. The risk is if they go later, you've
got to go an awful lot more. My first interview
is it we're going to start to see secrets from
high fuel prices, high transport costs into more generalized inflation.
And that's the sort of a story that the Reserve

(02:10):
Bank needs to stomp over and needs to stomp all over.
You send the message credit early in a cwiple once again,
a stitch in time. I think we'll save nine, all.

Speaker 1 (02:17):
Right, appreciate it, Cameron Begery. I don't think you can
argue with that?

Speaker 2 (02:19):
Can you?

Speaker 1 (02:20):
Stitch in time saves night? For more from the Mic
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