Michelle Maynard: The board is actually going to have to front a media conference and answer questions

Finance expert Michelle Maynard breaks down what’s going on with the Reserve Bank changes in terms Clairsy, Lisa & the rest of us can understand.

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Major overhaul has been announced for the Reserve Bank and
to tell us exactly what it all means. Michelle Maynard
from the Carbon Group. Hello, Michelle, Michelle right, coming to
our rescue to explain to us. This is an interesting
way Clayman's terms. What exactly is the overhaul?

Speaker 2 (00:17):
Yeah, so basically the Reserve Bank, we all know it's
our friend, we love them. Every month they meet and
they set the monetary policy, which basically for most everyday
people is interest rates. That's what they do. But we
know over the past twelve months they haven't really done
what they said they were going to do, which was
not touched interest rates until twenty twenty four. So what

(00:38):
they're doing is they're splitting out a separate monetary policy board,
which means that we only eight people who are going
to be setting interest rates and what the government does
in terms of monetary policy, and they're going to be
changing how they do that. So the hope is not
that it's going to bring interest rates down, because that
might not be the effect, but it means that we're
going to be able to understand what they do better.

Speaker 3 (01:02):
Is this a real kick in the teeth of Philip
Lohan's team, you know, because it's not a vote of
confidence in them, is it.

Speaker 2 (01:07):
Well, if somebody else was brought in to do your job,
you probably didn't think you were doing it that well.
And that's basically what this is about. Is he said
interest rates weren't going to go up into a twenty
twenty four, and we've had ten in a row. And
so with this new board, they're only going to meet
eight times a year, so once every six weeks. So
we're going to have to set our clocks a little
bit differently to when we watch for that announcement. But

(01:28):
rather than being a one page press release after this
meeting to say why they've made a decision, the board
is actually going to have to front a media conference
and answer questions and also disclose who voted for the
interest rate rise and who didn't. So it's going to
be really interesting because we're going to be able to
rather just lump blame on one person, good old Fiel,

(01:48):
We're going to see everybody there and understand what I understand,
the reasons why they're making the decisions they're making.

Speaker 1 (01:53):
Rather than just telling us decisions being made. I guess
most people with the Mortgage's question is what does this
just essentially mean for me?

Speaker 2 (02:01):
What I'm really happy about with is and it doesn't
come into effect until twenty twenty four, so we've got
some time. Yesterday I got another letter from my bank
to say that my interest rate was going up again,
and the last time the Reserve Bank made that decision
was two months ago. So by getting this at once
every six weeks, not once every four, it's going to
do two things. One's going to allow the economy to

(02:23):
feel the effects of that a little bit more so
we're going to be able to understand. But also for
mortgage told us, it's going to allow us to feel
the effects and get prepared and not get these letters
months after the decision because the banks are trying to
play catch up.

Speaker 1 (02:35):
Yeah, I found that I'm getting I'm getting the letter
before the other one that went you know that changed
last time has even gone into effects.

Speaker 3 (02:43):
They've changed.

Speaker 1 (02:44):
Your mouth's coming out getting a letter saying there's more
and I'm totally confused.

Speaker 2 (02:49):
I mean, it's selling the letters. I'm sure that would
take millions out of the economy in terms of posting anyway,
So that you know, I know that really a great idea.

Speaker 3 (02:58):
I'm a little bit baffled. Boy, there's one now with
Elbow and Jim Charmers. And why didn't this happen with
Hawk competing in eighty nine when the interest rates are
over seven night percent? What's changed?

Speaker 2 (03:07):
Well, Clery, I was four in nineteen eighty nine. I'm
tali is sure what happened back then? Mate, we didn't get.

Speaker 1 (03:14):
I'm doing.

Speaker 2 (03:15):
But I think I think it's a long long time coming.
Definitely a long time coming, and it's got bipartisan support
to which is what I love is that the government
is looking at these not from a political perspect there,
but both sides are getting on board to make these
changes in printable. Once obviously the legislation goes to government,
we'll see what they fight out over then after that, Yeah.

Speaker 3 (03:35):
Gotcha, Michelle.

Speaker 1 (03:36):
All this aside, where do you think interest rates will
go for the rest of the year.

Speaker 2 (03:39):
Well, interestingly, a couple of the majors have quietly, quietly
dropped their long term fixed interest rates, and what that
normally means is they think interest rates are going to
be coming down. So look, I think there may be one,
possibly two more upwards rate rises for this year, depending
on how inflation goes and then by the end of
the year we should hopefully start seeing them come back

(04:00):
be on again.

Speaker 1 (04:01):
Right, all right, Michelle, Two board meetings, all right, fantastic,
Always lovely to talk to you and get a little
splaining Michelle's plaining.

Speaker 3 (04:12):
Have a great, great date, and my favorite line on
the show this week clazy always four and sorry guys.

Speaker 2 (04:21):
Great