Mike's Minute: Who I'd have for the Governor of the Reserve Bank

Can I suggest Jarrod Kerr for Governor of the Reserve Bank?

Jarrod is Kiwibank's Chief Economist.

He has been completely consistent in his ongoing commentary around interest rate cuts and the Reserve Bank's need to do more.

To be fair, our own Greg Smith at Devon Funds Management has told us, and argued, a similar story.

The Kiwibank economic report that got a decent amount of coverage over the weekend is Jarrod's - proof positives that he is right and Adrian Orr and Christian Hawkesby have been, and are, wrong.

As long as they continue to be myopic and look at nothing but inflation they can argue two things.

1) It's in the band, even though it's dangerously close to not being, and will most likely breach it this year,

2) This ongoing, but increasing false, idea that they have cut enough and the efforts of that will flow through eventually.

We are virtually in August and the 25 points cut in the latter part of this year that's supposed to be lift off is nothing of the sort and the Kiwibank report confirms it.

It tells us what we know already - the further south you go the better it is.

But here is the real news; even in the best, most lucrative, optimistic part of the country i.e Otago and Southland they only get 5/10.

A half mark is as good as it gets. The rest of the country is miserable.

Are there signs? Yes, but how long do you want to squeeze the economic lemon looking for juice?

Dairy, meat and kiwifruit - all the stuff we have talked about, and celebrated, is not only doing the heavy lifting; it's doing almost all the lifting.

Tourism is there in Otago. But its still only 86% of what it was six years ago.

Confidence is hard  to find, foreigners still can't buy a house when they invest millions, and for every dollar you get from lower interest rates you pay $2 more for your power and insurance and rates, which have become the new version of highway robbery.

The economy needs help. It needs a major enthusiast, it needs a circuit breaker and the Reserve Bank and their view and actions are potentially it.

Jarrod sees it, Greg sees it, John Key sees it and wants a full 100 points drop.

But until anyone of them is Governor, we rely on Christian and his committee and that is where the problem lies.

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Episode Transcript

Speaker 1 (00:00):
Can I suggest Jared Kerr for Governor of the Reserve
Bank Jared's Kibibanks chief economists. Now, he's been completely consistent
in his ongoing commentary around the interest rate cuts and
the reserve banks need to do more and to be fair. Actually,
our own Greg Smith at Devon has told us and
argued a similar sort of story over the last few months. Now.
The Kiwibank Economic report that got a decent amount of

(00:20):
coverage over the weekend is Jared's proof positive that he
is right and Adrian and Christian have been and are wrong.
As long as they continue to be myopic and look
at nothing but inflation, they can argue one, it's in
the band, even though it's dangerously close to not being
and will most likely breach it this year. And two
this ongoing but increasing false idea that they have cut

(00:42):
enough already and the efforts of that will flow through eventually.
See here's the problem. We're virtually in August and the
twenty twenty five, the latter part of this year that
was supposed to be lift off is nothing of the sort.
In the Kiwibank report confirms it. It tells us what
we already know Obviously, the further south you go in
this country, the better off it is. But here's the
real news. Even in the best, most lucrative, optimistic part

(01:02):
of the country i e. Otago and Southland, you only
get five out of ten. That's your top score. Five
out of ten. A half mark is as good as
it gets. The rest of the country is miserable. Are
there science, Yes, but how long do you want to
squeeze the economic lemon? Looking for juice, dairy meat, kiwi fruit,
all the stuff we've talked about and celebrated. It's not
only doing the heavy lifting, it's doing almost all the lifting.

(01:24):
Tourism is there in Otago, Central, Otago Shore, but it
is still only eighty six percent of what it was
six years ago. Confidence hard to find. Foreigners still can't
buy a house when they invest millions. And for every
dollar you get from lower interest rates, you're going to
pay two dollars more for your power, for your insurance,
for your rates, which have become the new version of
highway robbery. The economy needs help. It needs a major enthusiast,

(01:48):
It needs a circuit breaker, and the Reserve Bank and
their view and actions are potentially it. Jared sees it,
Greg sees it, John Key sees it. He wants a
full one hundred basis points. But until any one of
them is the governor, we rely on Christian and his committee,
and that is where the real problem lies. For more
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(02:10):
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