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Speaker 1: Right now the Reserve Bank keeping the OCR on hold

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Speaker 1: three point twenty five percent. A pause on our way

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Speaker 1: down the OCR ladder, you could say, Brad Olsen infometrics

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Speaker 1: with us. Now, Hi, Brad, good afternoon. So what is

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Speaker 1: with the pause?

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Speaker 2: Well, it looks like the Reserve Bank is just a

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Speaker 2: bit cautious and being careful given all of the uncertainty

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Speaker 2: in the economy. Now you might think when I say uncertainty,

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Speaker 2: I mean the global ructions, tariffs and similar but actually

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Speaker 2: reading this statement from the Reserve Bank today, it seems

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Speaker 2: are just a little bit more cautious actually about the

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Speaker 2: likes of inflation, which are seeing a few bits and

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Speaker 2: pieces starting to get a bit hotter a bit too quickly,

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Speaker 2: but also the uncertainty over New Zealand's economic recovery. We

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Speaker 2: had at the start of this year a good increase

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Speaker 2: in GDP up point eight percent, but economic indicators since

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Speaker 2: then have been a lot more challenging. And I think

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Speaker 2: that's where the Reserve Bank they just want another couple

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Speaker 2: of months of data to figure out where things are

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Speaker 2: going before they make their biggot next call over where

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Speaker 2: to next for interest rates?

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Speaker 1: Doesn't mean it's good for us but to be fair

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Speaker 1: to them, we're a two and a half percent doesn't

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Speaker 1: take your much to notch up, and then you're close

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Speaker 1: to and you're almost touching, and then before you know it,

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Speaker 1: you're over.

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Speaker 2: Well, that's basically what we did last time. We kept

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Speaker 2: looking at the inflationary numbers and saying, look, they're not

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Speaker 2: good at the moment, but you know what, looking forward,

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Speaker 2: they'll they'll be all right. And then by the time

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Speaker 2: we figured out that they weren't all right, that inflation

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Speaker 2: was more persistent, things had gotten out of hand. But

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Speaker 2: I think also for the Reserve Bank, they're also banking

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Speaker 2: on the fact that interest rates are still down quite

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Speaker 2: a lot from where they've already been. You know, we've

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Speaker 2: seen two point two five percentage points lopped off the

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Speaker 2: ocr over the last year and a bit. That means

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Speaker 2: that for a lot of people, yes, interest rates are

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Speaker 2: still they might be paying those high rates, but they

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Speaker 2: will be refixing at some point over the second half

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Speaker 2: of this year. A lot of the heavy liftings being done.

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Speaker 2: But the Reserve Bank trying to now calibrate what's the

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Speaker 2: right point, And to be fair Ryan, they also reckon

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Speaker 2: that there is more to come. They were quite explicit

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Speaker 2: today that if they continue to evolve as they broadly expect,

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Speaker 2: that will give them more scope to continue to cut

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Speaker 2: the official cash rate this year. I just don't think

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Speaker 2: there's too much more left in that. There's probably only

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Speaker 2: a few more tweaks, maybe one or two cuts by

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Speaker 2: the end of this.

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Speaker 1: Year, get us down to three two point seventy five

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Speaker 1: something like that. Brad, appreciate you. Brad Olson, Infametric's principal economists.

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