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Speaker 1: RB Day Today, of course they open their account for

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Speaker 1: the year, including the debut of the shiny new governor,

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Speaker 1: doctor Anda Bremen. Cash waits at two two five commentary

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Speaker 1: since they last talked, actually has changed quite a bit.

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Speaker 1: Mike Jones as the Ben's it's chief economist, and as

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Speaker 1: with us, Mike morning, it has changed, hasn't it. In

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Speaker 1: the ensuing period there was a possibility once we'd get

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Speaker 1: a cut this year, all of that's off the table,

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Speaker 1: isn't it.

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Speaker 2: That's right. I think this meeting today is going to

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Speaker 2: be about basically swapping out that mild easing bias that

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Speaker 2: the bank head back in November and probably replacing it

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Speaker 2: with a mild tightening.

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Speaker 1: BIAUS tightening bias. By when when's a move up?

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Speaker 2: Do you think, Well, in the forecast we've got September

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Speaker 2: of this year and then another in December. I mean

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Speaker 2: that might be a bit far for the bank to

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Speaker 2: move just today we think I'll probably want to signal

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Speaker 2: a height by about December of this year. So still

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Speaker 2: you know, a lot of wiggle room, given things can

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Speaker 2: change in that period of time. But equally, the changes

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Speaker 2: that were seen that November do warrant that that shift

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Speaker 2: in interest right Outlook, if.

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Speaker 1: She says today, by the end of the year, we're

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Speaker 1: probably going to increase interest rates. If she says that materially,

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Speaker 1: do people then get depressed and freak out and whatever

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Speaker 1: recovery we've got going stalls.

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Speaker 2: No, because I think she would essentially be validating where

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Speaker 2: the market's got to already. I mean, I think if

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Speaker 2: you look at market pricing, actually there's a strong chance

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Speaker 2: of an October September hike being factored in, and that's

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Speaker 2: obviously built into Morga traits as they stand. So No,

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Speaker 2: I think that the markets are already there in some sense,

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Speaker 2: and it would just be a bit of a hat

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Speaker 2: set or validation from the Well, see what.

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Speaker 1: Does that say? If you're right, she's right and that's

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Speaker 1: what happens, what does it say about the capacity of

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Speaker 1: an economy that barely struggles to life. We're gasping for breath,

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Speaker 1: and then all of a sudden we've got too much growth.

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Speaker 1: In other words, we can't grow before we get capped. Yeah.

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Speaker 2: I think it's a really interesting thing to watch from

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Speaker 2: here is where that speed limit is. I mean, how

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Speaker 2: fast or not can we grow without generating inflation and

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Speaker 2: I say the news on that front recently has not

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Speaker 2: been great. I mean, we've been through a three year,

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Speaker 2: very difficult recessionary period, and yet we haven't really seen

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Speaker 2: in face and come back to the extent we might

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Speaker 2: have might have liked. And so that's something that zero

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Speaker 2: Big is going to have to factor and put into

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Speaker 2: its thinking, the fact that yeah, we may just have

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Speaker 2: that slow speed limit sticking around for this year.

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Speaker 1: It's going to be interesting to see and it might

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Speaker 1: appreciate it. Mike Giants, who's the begin chief Economist.

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