Ryan Bridge: What we got from the RBNZ yesterday

So what do we know today that we didn't know yesterday after the big show from the Reserve Bank? 

Well not much, really. 

The cut was expected - it was already priced in. They're a bit more rosy on growth, it looks like the end of the cycle for cuts. 

But beyond that, it really is guesswork. 

The central outlook was 'balanced'. Meaning closed wallets could could hurt the outlook, higher housing prices and export prices could help it. 

We put a lot of faith in the OCR to get us out of the rut.

Even though it hasn't really worked thus far, even after six rounds of slashing.

At one point in the presser the Chief Economist was almost repeating this like a mantra, as if by saying it over and over again, he'd will it to happen. 

There are two problems here:

First, we've heard it all before and not seen the results.

Second, by their own admission, the GDP numbers we've been relying on aren't reliable. 

There's a bunch of seasonality in the numbers - especially for that shocker in June where where we apparently went backwards almost 1%.

We didn't. The computer's a bit bust after Covid and hasn't caught up, basically. 

The good news? It probably wasn't as bad as they said it was. The bad news? Growth the following quarters probably wasn't as good as forecast either. 

Give with one hand and take with another. 

So we have a system we're hoping like hell still works in this new post-Covid/tariff environment with sticky inflation and pretty lame-o growth.

And numbers we can't really rely on, which if you cast your mind back to quarter two, get blown up by us in the media, scaring people into closing their wallets again, and perpetuating the cycle. 

To be be fair, there's always been a lag with the OCR working its magic.

And at some point, surely, we'll hit the g-spot again, for growth. If for no other reason than what goes down must, at some point, bounce back up.

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Episode Transcript

Speaker 1 (00:00):
So what do we know today that we didn't know
yesterday after the big show from the Reserve Bank. Well,
the answer is not much. Really. The cut was expected
priced in their outlook bit more rosy on growth. It
looks like this is the end of the cycle for cuts.
But beyond that it really is all guesswork, isn't it.
The outlook, the central outlook was what they call balanced,

(00:20):
meaning if we keep our wallets closed, that could hurt
the outlook, could hurt the economy. Higher house prices, export prices, well,
they could help it. Are we any wiser? We put
a lot of faith in the OCI to get us
out of the rut, and even though this is despite
the fact, it hasn't actually really worked for us thus far,
has it, even after six rounds of slashing. At one

(00:40):
point in the press yesterday the Chief Economist was almost
repeating this like it was a mantra, as if by
saying it over and over again he would will it
to happen. There are two problems here. First, we've heard
it all before and not seen the results in Two,
by their own admission, the GDP numbers that we've been
relying on aren't reliable of seasonality, in the numbers, especially

(01:02):
for that shocker in June where we apparently went backwards
almost eight percent. We didn't. The computer's a bit bust
after COVID hasn't quite caught up. Basically, the good news
it probably wasn't as bad in that quarter as they
said it was. The bad news growth the following quarters
probably wasn't as good as forecast either. So giveth with

(01:23):
one hand and taketh with another. So we have a
system we're hoping like hell will still work in this
new post COVID tariff environment with sticky inflation and pretty
lame o growth, and the numbers well, we can't really
rely on them, which if you cast you in mind
back to quarter two, they get blown up by us

(01:44):
in the media. We're guilty as charge, scaring people into
closing their wallets again and again, perpetuating the cycle. To
be fair, there's always been a lag with the ocr
working its magic, and at some point surely will hit
the g spot again for growth, if for no other
reason than what goes down must at some point bounce

(02:05):
back up. For more from early edition with Ryan Bridge,
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