1 00:00:00,200 --> 00:00:03,000 Speaker 1: And everyone is very excited as we know about the 2 00:00:03,000 --> 00:00:05,680 Speaker 1: Reserve Bank cutting the OCR but other banks passing it on. 3 00:00:05,720 --> 00:00:07,880 Speaker 1: Liam dan As the Herald's Business, the editor at large, 4 00:00:07,960 --> 00:00:10,640 Speaker 1: it's been taking a look at it, ALM, did I Heather? 5 00:00:10,680 --> 00:00:11,520 Speaker 1: So they passed it all on? 6 00:00:11,640 --> 00:00:15,200 Speaker 2: Or what? I haven't seen anything today. I mean, look, 7 00:00:16,000 --> 00:00:18,239 Speaker 2: A and Z went early with a bit of a 8 00:00:18,320 --> 00:00:22,800 Speaker 2: cut to fixed interest rates on Tuesday night, and I've 9 00:00:22,840 --> 00:00:25,880 Speaker 2: seen the banks. Now the banks more or less match that, 10 00:00:26,040 --> 00:00:29,120 Speaker 2: but that's like twenty basis points and it was before 11 00:00:29,240 --> 00:00:32,479 Speaker 2: the actual ocer cut. They passed on the floating rates. 12 00:00:32,680 --> 00:00:34,760 Speaker 2: So and you get all the press releases about that 13 00:00:34,920 --> 00:00:37,279 Speaker 2: on the minute in fact that you know, they were 14 00:00:37,320 --> 00:00:41,840 Speaker 2: arriving before we'd even received the news just about But yeah, look, 15 00:00:42,479 --> 00:00:46,479 Speaker 2: I know we're sort of thinking we're gonna get Nicola 16 00:00:46,520 --> 00:00:50,800 Speaker 2: Willis's words relief for regular Kiwi mortgage holders and all 17 00:00:50,840 --> 00:00:52,960 Speaker 2: that sort of stuff, but not March, and not unless 18 00:00:52,960 --> 00:00:55,680 Speaker 2: there's a bit of competition brewing. It looks like they've 19 00:00:55,720 --> 00:00:57,800 Speaker 2: sort of all stared at each other and said, are 20 00:00:57,800 --> 00:01:00,160 Speaker 2: you going to cut them? And it's like, well maybe. 21 00:01:00,240 --> 00:01:02,240 Speaker 1: But how much it was already priced in and had 22 00:01:02,240 --> 00:01:03,320 Speaker 1: been cut in advance. 23 00:01:04,480 --> 00:01:07,640 Speaker 2: Well, that twenty basis points is about as good as 24 00:01:07,640 --> 00:01:08,200 Speaker 2: it's going to get. 25 00:01:08,200 --> 00:01:10,880 Speaker 1: I guess, right, is that the twenty basis points, Like, 26 00:01:10,920 --> 00:01:13,240 Speaker 1: have you measured from the last OCR cuts to this 27 00:01:13,319 --> 00:01:16,279 Speaker 1: OCR cup That whole duration is only twenty basis points. 28 00:01:16,959 --> 00:01:20,600 Speaker 2: They did well, They passed through the full fifty pretty 29 00:01:20,640 --> 00:01:23,720 Speaker 2: well on the last one. And then I mean, yeah, look, 30 00:01:24,000 --> 00:01:27,520 Speaker 2: there are reasons that they will look to their overseas 31 00:01:28,360 --> 00:01:31,760 Speaker 2: borrowing costs having gone up because everybody's worried about you know, 32 00:01:31,800 --> 00:01:34,720 Speaker 2: what Donald Trump might do to inflation in the US, 33 00:01:34,760 --> 00:01:36,840 Speaker 2: and so the bond yields are all up over there, 34 00:01:36,840 --> 00:01:39,520 Speaker 2: so that's lifted the borrowing costs. And yeah, I guess 35 00:01:39,640 --> 00:01:42,720 Speaker 2: the wholesale markets price a bit in, But then you 36 00:01:42,720 --> 00:01:46,119 Speaker 2: know it's still it does still come back to competition. 37 00:01:46,160 --> 00:01:50,240 Speaker 2: If you had, you know, a keen bank ready to 38 00:01:50,520 --> 00:01:52,480 Speaker 2: grab a bit more competition, they might go and if 39 00:01:52,480 --> 00:01:54,400 Speaker 2: one of them goes, and look, it could still happen. 40 00:01:54,760 --> 00:01:57,680 Speaker 2: It's only been just over twenty four hours. But I 41 00:01:57,760 --> 00:02:00,680 Speaker 2: just feel like if you were sitting there waiting, you know, 42 00:02:00,760 --> 00:02:04,000 Speaker 2: to to cash in on the on the big great cut, 43 00:02:04,320 --> 00:02:07,440 Speaker 2: you know, fifty basis points is a double not much 44 00:02:07,520 --> 00:02:07,920 Speaker 2: there for you. 45 00:02:08,320 --> 00:02:10,440 Speaker 1: So what's going on? Is it just because they don't 46 00:02:10,480 --> 00:02:12,520 Speaker 1: have to or is there something else that's playing into this. 47 00:02:13,480 --> 00:02:15,639 Speaker 2: Well, I think it's a combination. So I don't want 48 00:02:15,639 --> 00:02:17,560 Speaker 2: to put it all on the banks. But because because 49 00:02:17,560 --> 00:02:20,680 Speaker 2: there are those international forces, they did all see it coming. 50 00:02:20,680 --> 00:02:23,240 Speaker 2: So we got out to any basis points, I guess, 51 00:02:23,840 --> 00:02:26,240 Speaker 2: starting on the Tuesday, and then then quietly sort of 52 00:02:26,880 --> 00:02:29,320 Speaker 2: and I'm sort of talking about the one year, one 53 00:02:29,400 --> 00:02:33,520 Speaker 2: year sort of fixed rate roughly, you know, one to 54 00:02:33,560 --> 00:02:35,520 Speaker 2: two year fixed rates, where a lot of Kiwis are 55 00:02:35,919 --> 00:02:38,280 Speaker 2: Kiwi's are really more six months and a year at 56 00:02:38,280 --> 00:02:40,560 Speaker 2: the moment because they've stayed short because they're expecting to 57 00:02:41,280 --> 00:02:45,800 Speaker 2: see it come down. But you know, Adrian Ows warned unfortunately, 58 00:02:46,800 --> 00:02:48,640 Speaker 2: unless we see a change in the sort of the 59 00:02:48,680 --> 00:02:52,280 Speaker 2: global outlook, and you know, he does say, look, it'll 60 00:02:52,320 --> 00:02:54,000 Speaker 2: be nice if the banks were repaired to pass on 61 00:02:54,040 --> 00:02:56,600 Speaker 2: a bit of the margin. At this point, the margins 62 00:02:56,600 --> 00:03:00,680 Speaker 2: are still higher than the average pre COVID. But unless 63 00:03:00,680 --> 00:03:02,880 Speaker 2: we see that, you know, it's going to take some 64 00:03:02,960 --> 00:03:05,240 Speaker 2: quite big cuts, and they're talking about going down to 65 00:03:05,280 --> 00:03:08,960 Speaker 2: three with the ocr but it's not going to pass through. 66 00:03:09,000 --> 00:03:11,560 Speaker 2: That's another you know, one point two five percent, but 67 00:03:12,200 --> 00:03:14,600 Speaker 2: really it's not going to be that big a pass through, 68 00:03:14,639 --> 00:03:16,800 Speaker 2: so that sort of creates a bit of problems, a 69 00:03:16,800 --> 00:03:19,400 Speaker 2: bit of a headwind for that interest rate lead recovery. 70 00:03:19,440 --> 00:03:19,760 Speaker 2: I guess. 71 00:03:19,919 --> 00:03:21,919 Speaker 1: Yeah, interesting stuff. Hey, thank you very much. I really 72 00:03:21,960 --> 00:03:24,600 Speaker 1: appreciate that. Lim. That's Liam Dan, the Herald's Business editor 73 00:03:24,639 --> 00:03:25,519 Speaker 1: at large. 74 00:03:25,560 --> 00:03:28,720 Speaker 2: For more from Heather Duplessy Allen Drive, listen live to 75 00:03:28,840 --> 00:03:31,840 Speaker 2: news talks that'd be from four pm weekdays, or follow 76 00:03:31,880 --> 00:03:33,640 Speaker 2: the podcast on iHeartRadio.