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Speaker 1: So Trump's tariffs are heading countries all over the world.

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Speaker 1: You might be wondering what this means for mortgage interest rates. Well,

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Speaker 1: we've got the Reserve Bank here reviewing the OICR next Wednesday.

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Speaker 1: Economists still expecting that we will get a twenty five

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Speaker 1: basis point cuts at Nick Tuffley's with us Asbchief Economist

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Speaker 1: Nick Good evening. Oh, so you think no change to

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Speaker 1: what was expected or what was being expected after what's

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Speaker 1: happened in the US.

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Speaker 2: Well, yes, we think that the Reserve Bank's still going

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Speaker 2: to be pretty comfortable that interest rates me to go

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Speaker 2: a bit lower, and we see them cutting by twenty

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Speaker 2: five points next week and still cutting by twenty five

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Speaker 2: in May. I think what's been happening locally is fairly

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Speaker 2: consistent with the reserve banks view their inflations under control

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Speaker 2: enough to cut down to about three and a quarter percent,

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Speaker 2: and the reserve banks, like everybody else, kind of it

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Speaker 2: on the sidelines, waiting to see just what sort of

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Speaker 2: carnage comes out of the train wreck from Donald Trump.

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Speaker 1: What is it going to do inflation? I mean, it's

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Speaker 1: all crystal ball gazing at this point, isn't it. But

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Speaker 1: what do you expect well.

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Speaker 2: Our hunch is that sort of in the short term

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Speaker 2: we may well get some slight inflation impacts when you're

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Speaker 2: looking outside over the next year, but longer term, the

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Speaker 2: dominant impacts could be slightly negative. So you're kind of

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Speaker 2: breaking it up into In the short term, you could

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Speaker 2: have the new Zealand dollar weekend, which could push import

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Speaker 2: prices up. Some things that we buy may get caught

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Speaker 2: up in all the supply chain added expenses from tariffs,

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Speaker 2: and those things could go up to we're importing stuff

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Speaker 2: from the States, but you could also get stuff coming

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Speaker 2: in from places like China, Canada, other countries where they've

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Speaker 2: been clubbed by tariffs and they're are pretty desperate to

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Speaker 2: sell their stuff elsewhere. So there's a lot of mixed

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Speaker 2: influences in the short term. Longer term, if our exports

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Speaker 2: do get a bit affected, then those sort of more

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Speaker 2: longer capacity related inflation pressures could be a bit damper

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Speaker 2: in the longer term, and the reserve thing is going

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Speaker 2: to be focusing on where are things going to be

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Speaker 2: a year or two from now, not say over the

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Speaker 2: next year.

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Speaker 1: Then there's the I mean you mentioned imports and potentially

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Speaker 1: importing inflation but then you look at the price of

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Speaker 1: oil today, you know, and that the fact that opec

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Speaker 1: plus is cranking up the supply.

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Speaker 2: Yes, and that's the thing that you've got. You've got

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Speaker 2: a lot of lot of influencers.

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Speaker 1: Competing from the competing forces.

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Speaker 2: Yeah, quite exactly, but different timeframes as well. And I

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Speaker 2: think when we're looking at okay, what does this mean

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Speaker 2: for the Reserve Bank, they're trying to keep the lid

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Speaker 2: on inflation. Some of these influences on inflation could be

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Speaker 2: quite short terms. So all price changes, exchange rate impacts,

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Speaker 2: any sort of lifts and import costs in the short

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Speaker 2: term tend to kind of peter out within say about

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Speaker 2: a year, and so it's that those impacts that could

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Speaker 2: linger on, which is more particularly if our export sectors

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Speaker 2: start to feel a bit of pressure and they cut

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Speaker 2: back on spending, they don't have the revenue to invest

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Speaker 2: or spend. Influencers from there are likely to be the

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Speaker 2: ones of the Reserve. Thanks focuses on a lot more

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Speaker 2: and just kind of looks through anything that's a bit

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Speaker 2: shorter term.

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Speaker 1: Nick, Thanks for that. Nick Tuffley, asb Chief Economists the

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Speaker 1: ICR announcement of you made next Wednesday. For more from

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