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Speaker 1: Bryan Bridge, let's go to Jena to training. Media got

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Speaker 1: their first chance to check out the new Reserve Bank

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Speaker 1: governor this morning. Arna Breman is her name hosted a

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Speaker 1: breakfast event for journalists and Janey was there. Jenay, good evening,

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Speaker 1: Hey Ryan, So what was it like? What was she like?

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Speaker 2: Well, she's a serious operator from the Central Bank in Sweden.

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Speaker 2: The thing we were all really interested in today was

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Speaker 2: whether she would try to talk down the market so

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Speaker 2: people might be aware that wholesale interest rates have been

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Speaker 2: rising quite dramatically over the past fortnight since the Reserve

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Speaker 2: Bank cut the ocr and this prompted Westpac yesterday to

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Speaker 2: announce that it was actually increasing some of its longer

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Speaker 2: term mortgage and term deposit rates. So today I went

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Speaker 2: along to the breakfast and thinking it'd be lovely to

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Speaker 2: meet the new governor. But really what I really wanted

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Speaker 2: to know was was she okay with the way the

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Speaker 2: market was going or would she try to talk it down?

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Speaker 2: And she didn't try to talk it down. She's only

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Speaker 2: been in the job for ten days, but she did

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Speaker 2: not try to change the trajectory of those wholesale interest rates.

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Speaker 1: She did say anything, you know, all options are still

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Speaker 1: are always on the table, though. Is that not going

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Speaker 1: far enough? You don't think no.

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Speaker 2: So the market didn't really respond to her comments. So

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Speaker 2: what she said was fairly safe in the sense that

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Speaker 2: she said that you know, she was aware that financial

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Speaker 2: conditions were tightening and should keep an eye on the

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Speaker 2: data as it comes in. So it's quite a long

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Speaker 2: gap between now and when the Reserve Bank next reviews

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Speaker 2: the OCR. That'll be only on February eighteen, so she

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Speaker 2: did have an opportunity to talk it down. But you know,

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Speaker 2: I've just talked to a few people about this, and

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Speaker 2: you know, we're thinking, on the one hand, it would

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Speaker 2: be out of place perhaps if she did swoop on

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Speaker 2: in and talk the market around, especially because these days

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Speaker 2: it's a committee that sets the OCR, that sets moneth policy,

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Speaker 2: it's not just the governor. So she said she hadn't

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Speaker 2: even had a chance to meet all her fellow Monetary

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Speaker 2: Policy Committee members, so maybe it would have been out

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Speaker 2: of hand if she came in and took the market down.

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Speaker 2: On the other hand, the economy still needs support, according

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Speaker 2: to most commentators, so by having these mortgage rates go up,

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Speaker 2: that really potentially does slow our economic recovery.

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Speaker 1: Yeah, I won't yet. No, it's definitely not a great headline,

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Speaker 1: is it if you're the Minister of finance. But I

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Speaker 1: wonder whether because yeah, you just come in, but also

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Speaker 1: with the market reaction, even if she had said something

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Speaker 1: which people might have got, Oh, she's talking it down.

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Speaker 1: She is, as you say, only one on the committee, right,

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Speaker 1: so she gets one vote, just like the rest of them.

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Speaker 2: Yeah, exactly. So you know, back in the day, the

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Speaker 2: governor had all the power and that's not the case now.

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Speaker 2: So perhaps it's it is understandable, you know, but other

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Speaker 2: commentators are quite worried about where things are going. Westpac

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Speaker 2: is the only bank to have moved, but all the

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Speaker 2: banks steal in the same wholesale markets. So the funding

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Speaker 2: pressures that Westpack is under, the other banks are under

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Speaker 2: as well. The interesting thing now to look at is

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Speaker 2: to see, you know, which bank is next, and whether

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Speaker 2: there is some competitive tension. No doubt, the marketing departments

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Speaker 2: at the banks are talking to the you know, financial

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Speaker 2: nerds at the bank's trying to figure out, you know,

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Speaker 2: win might be the best time to announce their mortgage

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Speaker 2: rate hikes. It's not exactly a great headline, No, it's not.

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Speaker 1: And as I said, especially if you're Niola Willison, she's

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Speaker 1: out there saying basically shop around, And I mean, you've

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Speaker 1: got to hope that the banks don't all put their

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Speaker 1: rates up, because then you're shopping around for the same rate.

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Speaker 2: Well, you know, that's the thing. So these the wholesale rates,

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Speaker 2: which are the ones that largely affect the longer term

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Speaker 2: mortgage and term deposit rates, they are now about fifty

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Speaker 2: basis points higher than before the OCR cut. So the

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Speaker 2: result bank cut by twenty five points and the rates

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Speaker 2: are now about fifty points higher than before the cut.

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Speaker 2: So it's not only unwound the effect of the o

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Speaker 2: CR cut, but it's gone even further and that's in

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Speaker 2: the wholesale markets, which affect those long term rates. So, yes,

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Speaker 2: Nichola Willison, Christopher Luxen, who have been rarely milking the

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Speaker 2: whole interest rate cut situation and claiming, you know, claiming

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Speaker 2: it as a victory for themselves slightly wrongly. You know,

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Speaker 2: it's a debateable issue, but they're in a bit of

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Speaker 2: a tight spot now with the rates going up, and

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Speaker 2: definitely the last thing they need.

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Speaker 1: Janet, appreciate your time this evening and your analysis is

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Speaker 1: always generative training. The Herald's Wellington Business editor, who was

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Speaker 1: at the media only breakfast this morning with the new

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Speaker 1: Zoo Bank Governor Arna Brennan. For more from Heather Duplassy

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Speaker 1: Allen Drive Listen live to news Talks. It'd be from

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Speaker 1: four pm weekdays, or follow the podcast on iHeartRadio