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Speaker 1: Janetibstradi, the Herald's Wellington Business editor, is with us. Now,

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Speaker 1: how do you know? Okay, so how many banks have

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Speaker 1: dropped the mortgage rates by half a percentage point then.

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Speaker 2: Am out straight straight away, straight after the Reserve Bank

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Speaker 2: announced the cuts. In fact, one bank I got an

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Speaker 2: email from them before I got a message from the

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Speaker 2: Reserve Bank saying that it was cutting the OCR by

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Speaker 2: fifty basis points. So they've all moved, They've all moved quickly.

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Speaker 1: That's good. Okay. What are we expecting from how the

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Speaker 1: US election is going to affect what happens from here

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Speaker 1: on in? Because it sounds like the Reserve Bank's a

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Speaker 1: little worried about it.

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Speaker 2: Yeah, yeah, Look, I think the Reserve Bank today just

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Speaker 2: Adrianal tempered people's expectations a little bit, and in fact

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Speaker 2: he said the thrill might not be as big as

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Speaker 2: what it looks like. Those were Adrianaal's words today. Now,

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Speaker 2: the reason for this is that the OCR isn't the

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Speaker 2: only thing that influences the mortgage rates that you and

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Speaker 2: I pay. Banks also get funding from offshore markets. They

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Speaker 2: borrow money from overseas, and the issue here is that

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Speaker 2: the interest rates that are being charged for these money

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Speaker 2: markets around the world are elevated at the moment, and

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Speaker 2: that is because of the outcome of the U s election.

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Speaker 2: So because Donald Trump is promising tax cuts in the US,

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Speaker 2: people think that the deficit in the US will be deeper.

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Speaker 2: You know that the US will continue being in a

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Speaker 2: lot of debt. And also Donald Trump with the tariffs

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Speaker 2: and things that he's proposing, they could be inflationary. All

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Speaker 2: of this creates more uncertainty and more risk, and investors

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Speaker 2: price that risk into assets. And if there's more risk,

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Speaker 2: there's you know that there's a risk premiere priced in

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Speaker 2: that elevates interest rates. So if those interest rates in

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Speaker 2: global money markets are higher, then that influences banks funding costs,

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Speaker 2: and that influences the interest rates that we pay. So

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Speaker 2: you know that it's still a positive story. Mortgage rates

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Speaker 2: are still coming down. We should just be a little

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Speaker 2: bit cautious about the extent to which they will fall.

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Speaker 1: Yeah, that's a very good point. You know, thanks for

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Speaker 1: talking through. Appreciate it. You know. Tube Trainee, the Herald's

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Speaker 1: Wellington Business

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