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Speaker 1: And so before last week the Reserve Bank story seemed

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Speaker 1: fairly straightforward, didn't it. Twenty five points to day another

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Speaker 1: twenty five next meeting were largely done inflation in the box,

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Speaker 1: welcome to the new normal. Obviously, the world has since

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Speaker 1: been tipped on its head. So how does that play

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Speaker 1: out today? Aine's and chiep economist Sharon's on the back

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Speaker 1: were this, Sharon, good.

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Speaker 2: Morning, good morning.

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Speaker 1: Are we all aligned around twenty five today?

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Speaker 2: Yes, that is certainly the case, But obviously the risk

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Speaker 2: that they do something else has rhythen given all the

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Speaker 2: kerfuffle in the last week. So if they were to surprise,

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Speaker 2: then a fifty point cup would be likelier then a pause.

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Speaker 2: But there is a general agreement that the senseful thing

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Speaker 2: to do at the moment is just sick to the

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Speaker 2: plan and keep a watching brief.

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Speaker 1: How breaking news is the committee? I mean, how much

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Speaker 1: of what has happened in the last handful of days

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Speaker 1: will color what they're doing.

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Speaker 2: Well, it certainly colors the risks, but it's too soon

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Speaker 2: for them to actually put it into their forecast. It's

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Speaker 2: very unclear how this is all going to pan out.

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Speaker 2: People are realizing that there's less bluff in these tariff

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Speaker 2: moves than was hoped or perhaps assumed early on, and

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Speaker 2: therefore that the global growth outlook is weaker. I mean,

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Speaker 2: the direct tariff impact from New Zealand is manageable ten

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Speaker 2: percent tariff on about thirteen percent of our goods exports.

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Speaker 2: So that's okay, that's not a game changer. But if

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Speaker 2: global growth starts to look weaker everywhere and it really

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Speaker 2: impacts the outlook for the Chinese consumer and everyone else,

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Speaker 2: then that's a bit different.

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Speaker 1: Is three percent still neutral?

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Speaker 2: That is a REZI Bank's estimate at the moment, So

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Speaker 2: that's sort of what we're all working to. But it's

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Speaker 2: one of those things that they sort of wait and

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Speaker 2: see how things pan out and then realize, oh, it

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Speaker 2: must have been that. It seems a reasonable working assumption.

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Speaker 2: But they always keep an open mind on that front.

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Speaker 1: How important does the commentary is not a full monetary

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Speaker 1: So what he says, and the fact he's in part time,

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Speaker 1: he's only there for six months, it's all got a

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Speaker 1: flux vibe about it, doesn't it.

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Speaker 2: Yeah, But I wouldn't say it's what he says, it's

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Speaker 2: what the committee says. They do pour over those documents

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Speaker 2: together very much. So, yes, it's all going to be

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Speaker 2: about hints about what comes next, about how open they

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Speaker 2: are to cutting more, cutting faster. I would expect some

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Speaker 2: reassuring words that they stand ready to do whatever is

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Speaker 2: required to in the face of weapon might come around

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Speaker 2: the corner. So the market has already moved to price

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Speaker 2: a small chance of assist you today, but also more

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Speaker 2: cuts going forward. And I wouldn't expect the Reserve Bank

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Speaker 2: to push back against that because that's a very reasonable

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Speaker 2: affection of the risks as they stand today. So I

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Speaker 2: don't think the Reserve Bank will sound is as sure

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Speaker 2: about what comes next as they did in Tebriy.

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Speaker 1: But what about the psychology of in other words, the

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Speaker 1: key we say for people who are freaking out and

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Speaker 1: the mortgage people who are freaking out because they don't

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Speaker 1: know because no one knows, and that plays into the

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Speaker 1: vibe and the economy. Is that a problem.

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Speaker 2: Yeah. Confidence is definitely a really important channel, and we

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Speaker 2: are still at a pretty fragile stage of the recovery.

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Speaker 2: I mean, the recovery is definitely happening. You can see

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Speaker 2: that a whole across a whole lot of data, but

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Speaker 2: we're definitely not in the coctual part of things, where

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Speaker 2: people are feeling that we're on a really good part.

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Speaker 2: I think terms are sort of just starting to dust

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Speaker 2: off those investment plans and employment plans, and this could

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Speaker 2: see them put them back on the shelf. And there

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Speaker 2: was a bank already assumed in their last statement that

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Speaker 2: the global uncertainty would damp an investment. They'll be even

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Speaker 2: more alert to that possibility now. But of course the

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Speaker 2: first point cut could be counterproductive in that regard. And

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Speaker 2: so far as this is the message that.

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Speaker 1: Things are going to get really bad, jeez, it's interesting.

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Speaker 1: Good on you, Sharre and appreciate it very much. Sharon's

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Speaker 1: on them. I insert Cheap Economists. For more from the

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Speaker 1: Mic Asking Breakfast, listen live to news Talks it'd be

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