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Speaker 1: Now.

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Speaker 2: Kiwibank says if it was up to them, the ocr

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Speaker 2: would be going down all the way to three percent

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Speaker 2: on Wednesday. The cash rates currently at three and a

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Speaker 2: half percent. The Reserve Bank is widely expected to cut it.

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Speaker 2: Jeri Kerr is Kiwibank's chief economist.

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Speaker 1: Hi Jared Good evening, what.

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Speaker 2: Do you expect in just twenty five basis points on Wednesday?

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Speaker 1: I'll delivered twenty five. But they should lower the rack

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Speaker 1: and they are willing to cut below three percent? Does

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Speaker 1: the economy needs stimulus not restraint?

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Speaker 2: Why is there so much uncertainty about where this track

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Speaker 2: is going.

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Speaker 1: Well, there's a lot of uncertainty offshore. So the way

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Speaker 1: we're looking at it is that these tariffs, no matter

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Speaker 1: how much they get dialed back and turned back towards

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Speaker 1: ten percent, still a tariff across the world. Still slower growth.

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Speaker 1: We think that's a negative and we also think it

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Speaker 1: puts deflationary pressure on the economy. So yeah, we don't

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Speaker 1: agree with the risks of upside.

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Speaker 2: What does the budget do do you think for the

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Speaker 2: Reserve Bank? Does it give it latitude to cut deeper?

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Speaker 1: Yeah, it does. You have a government that is doing

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Speaker 1: a little bit with the with the invest boost, which

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Speaker 1: is great, but that won't that won't you change the

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Speaker 1: dial too much. They are not pumping a lot of

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Speaker 1: money into the economy at all, and they've got quite

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Speaker 1: a lot of restraint later on. So it actually falls

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Speaker 1: into much of policy to do something to get this

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Speaker 1: economy going.

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Speaker 2: Okay, So when do you think you reckon? It needs

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Speaker 2: to bottom out about two and a half percent, is

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Speaker 2: that right?

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Speaker 1: Yeah?

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Speaker 2: And when.

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Speaker 1: The early is possible by the middle of this year.

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Speaker 1: We have a theoretical number for neutral, which is a

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Speaker 1: rate that doesn't hurt, doesn't stimulate, and that's about three.

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Speaker 1: So sitting at three and a half now, we're actually

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Speaker 1: still in territory where interest rates are restraining growth, even

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Speaker 1: though we've been through a recession. So we're saying, actually

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Speaker 1: get it into stimatory territory and you know, let's kick

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Speaker 1: start there kind of into next year.

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Speaker 2: Jared, it's always good to talk to you. Thank you, mate.

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Speaker 2: That's Jared kirk hue, Banks, chief economist. For more from

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Speaker 2: Hither Duplessy Allen Drive, listen live to news talks. It'd

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Speaker 2: be from four pm weekdays, or follow the podcast on iHeartRadio.