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Speaker 1: Right to the economy. We've heard from the Fed this

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Speaker 1: morning it is fifty points. Also today our GDP figure

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Speaker 1: for the second quarter, so that's April May and June.

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Speaker 1: Consensuss we've gone backwards again. WESTPACX chief economist Kellye holds

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Speaker 1: back with us Kelly morning to you morning. Your numbers.

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Speaker 2: What we've got minus point four for the quarter and

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Speaker 2: minus point six for the year.

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Speaker 1: Okay, did you have fifty on the Fed?

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Speaker 2: We did not have fifty on the Fed. We had

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Speaker 2: twenty five. But there have been a lot of smoke

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Speaker 2: forming from the newspaper articles on the weekend suggesting it

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Speaker 2: was going to be a finally balanced decision. Oh god,

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Speaker 2: it certainly looks like the Fed's moved the gold posts.

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Speaker 1: Exactly do we react to that? Does the Central Bank

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Speaker 1: look at that and go hold on, we'll need to

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Speaker 1: rethink here or not?

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Speaker 2: Well. I think most central banks in the world will

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Speaker 2: be looking at this, because the US sets the global

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Speaker 2: risk through rate. I don't think the Reserve Bank probably

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Speaker 2: expected that they'd be moving by fifty basis points today,

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Speaker 2: so they'll be considering that. I mean, if you compare

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Speaker 2: the economic indo cater is between new Zealand and the US.

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Speaker 2: It looks unequivocally stronger in the United States.

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Speaker 1: So point four today, if you are right, Can we

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Speaker 1: then mount an argument that says, if it's point four

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Speaker 1: in Q two, it's probably something similar in Q three.

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Speaker 1: At the very least, it's backwards. Therefore it's a recession.

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Speaker 2: Oh, I think that we do expect that it'll go

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Speaker 2: backwards again in Q three, although it's going to be

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Speaker 2: a finely balanced thing. We've got minus point two for

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Speaker 2: the quarter in September, and there might even be a

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Speaker 2: bit of upside risk for that. We definitely think though

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Speaker 2: that Q two was the trough in this cycle, and

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Speaker 2: particularly in June. Look what it looks like. It was

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Speaker 2: the weakest month we've seen in quite a while.

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Speaker 1: Okay, So that partially answers my next question, because what

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Speaker 1: we are starting to see semantic don'tal stuff your confidence,

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Speaker 1: run services, business, consumers, et cetera. Is that real in

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Speaker 1: your view or is it hope born of desperation.

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Speaker 2: Well, there's a mixture of both, But if there's a

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Speaker 2: higher weight on hope right now, because we're quite early

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Speaker 2: in the easing cycle, we've only had the one twenty

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Speaker 2: five point cup. But I think the thing that businesses

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Speaker 2: in particular are really reacting to is that longer term

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Speaker 2: intistraits have formed a lot, so they've really got the

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Speaker 2: ability to access finance at a much cheaper level than

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Speaker 2: they have done for a good few years.

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Speaker 1: So surviving till twenty five is real.

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Speaker 2: Well, I think that is real, and I think probably

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Speaker 2: with a bit more optimism than they've had probably for

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Speaker 2: most of the last six months or so.

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Speaker 1: Good stuff, You have a good day, and we'll talk

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Speaker 1: again soon, Kelly E. Cold, Westpac Chief Economist. He says

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Speaker 1: minus zero point four. For more from the Mic Asking Breakfast,

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Speaker 1: listen live to news talks that'd be from six am weekdays,

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