1 00:00:00,560 --> 00:00:04,400 Speaker 1: Hugh matt On the text's flicked me your message, Jack. 2 00:00:04,559 --> 00:00:06,360 Speaker 1: I reckon that CPI data is going to be a 3 00:00:06,400 --> 00:00:08,719 Speaker 1: bit of a shock tomorrow, inflation coming in three point 4 00:00:08,800 --> 00:00:11,920 Speaker 1: nine four point one percent. Maybe Matt say it ain't. 5 00:00:12,039 --> 00:00:16,840 Speaker 1: So let's go to CEO of Infametris Brad Olsen, who 6 00:00:16,960 --> 00:00:20,439 Speaker 1: is counting down the ours to Statistics New Zealand and 7 00:00:20,440 --> 00:00:23,520 Speaker 1: their latest CPI data. Tell me Matt's wrong. Brad, tell 8 00:00:23,560 --> 00:00:24,120 Speaker 1: me he's wrong. 9 00:00:25,360 --> 00:00:27,440 Speaker 2: Look, I think it'd be pretty heroic for the inflation 10 00:00:27,560 --> 00:00:31,160 Speaker 2: numbers to remain at that level. We're actually picking an 11 00:00:31,160 --> 00:00:33,519 Speaker 2: annual rate of three point three percent, so we think 12 00:00:33,560 --> 00:00:37,000 Speaker 2: it's actually going to be you're proving quite a bit yeah. 13 00:00:39,120 --> 00:00:41,360 Speaker 1: The same right, picking three point three Yeah. 14 00:00:41,920 --> 00:00:44,000 Speaker 2: Around that sort of level. But I mean, I think 15 00:00:44,000 --> 00:00:46,200 Speaker 2: the thing that we're looking at now, and the piece 16 00:00:46,240 --> 00:00:48,320 Speaker 2: of a puzzle, we're a bit unsure about it. Even 17 00:00:48,360 --> 00:00:51,280 Speaker 2: if that headline number comes down, do we see enough 18 00:00:51,320 --> 00:00:55,960 Speaker 2: traction on the non tradable, domestically based inflation front, because 19 00:00:56,000 --> 00:00:58,200 Speaker 2: that's what the Reserve Bank is worried about. But you 20 00:00:58,200 --> 00:01:00,520 Speaker 2: look at some of the numbers recently that have come out, 21 00:01:00,800 --> 00:01:03,400 Speaker 2: food prices dropping for the first time, in the month 22 00:01:03,440 --> 00:01:06,839 Speaker 2: of June in about six years. You know, that's encouraging. 23 00:01:07,200 --> 00:01:09,480 Speaker 2: You look at the likes of the pace of rental growth. 24 00:01:09,520 --> 00:01:12,040 Speaker 2: It's high, but it seems to be sort of curving 25 00:01:12,400 --> 00:01:16,080 Speaker 2: around the other side. So there's some encouraging signs I 26 00:01:16,080 --> 00:01:19,240 Speaker 2: think that are coming through. The inflation is starting to 27 00:01:19,319 --> 00:01:22,240 Speaker 2: move into, you know, closer to where we want it 28 00:01:22,280 --> 00:01:24,480 Speaker 2: to be. The challenge all I think the difficulty writes 29 00:01:24,520 --> 00:01:26,800 Speaker 2: to households is that sure three point three percent is 30 00:01:26,800 --> 00:01:29,680 Speaker 2: a good number, and it is important for monetary policy. 31 00:01:29,720 --> 00:01:31,720 Speaker 2: It will help, you know, with the Reserve Bank when 32 00:01:31,760 --> 00:01:34,360 Speaker 2: they want to set interest rates slower. But if I'm 33 00:01:34,400 --> 00:01:37,520 Speaker 2: a household three point three percent still feels harsh when 34 00:01:37,560 --> 00:01:40,440 Speaker 2: it's three point three on top of you know, some 35 00:01:40,480 --> 00:01:42,600 Speaker 2: pretty big numbers of the last couple of years. You've had 36 00:01:42,640 --> 00:01:45,880 Speaker 2: like a twenty five percent increase in inflation over the 37 00:01:45,959 --> 00:01:48,240 Speaker 2: last couple of years, So households are still hurting. 38 00:01:48,480 --> 00:01:51,640 Speaker 1: Yeah, yeah, absolutely, Yeah, And in terms of baseline figures, 39 00:01:52,280 --> 00:01:54,800 Speaker 1: stuff is certainly expensive. But I mean the closer to 40 00:01:54,960 --> 00:01:59,200 Speaker 1: three it is, the more likely surely that the Reserve 41 00:01:59,280 --> 00:02:00,680 Speaker 1: Bank is going to sooner. 42 00:02:02,120 --> 00:02:04,800 Speaker 2: Yeah, I mean, definitely, given this sort of pivot in 43 00:02:04,840 --> 00:02:07,560 Speaker 2: the last couple of weeks and you know, moving from 44 00:02:07,920 --> 00:02:10,160 Speaker 2: or moving to a bit of a softer view, if 45 00:02:10,160 --> 00:02:12,560 Speaker 2: you will, on the economy. And that's sort of consistent 46 00:02:12,560 --> 00:02:16,440 Speaker 2: with other business surveys as well, which businesses themselves are saying, Look, 47 00:02:16,520 --> 00:02:19,880 Speaker 2: there's not that great domestic trading conditions out there. As 48 00:02:19,919 --> 00:02:23,160 Speaker 2: a business, I can't get great numbers of sales. If 49 00:02:23,200 --> 00:02:25,280 Speaker 2: that's the case, I'm pretty reluctant to put up my 50 00:02:25,320 --> 00:02:28,079 Speaker 2: prices because they don't want to scare away even more consumers. 51 00:02:28,600 --> 00:02:30,280 Speaker 2: And so that is, you know, all of that is 52 00:02:30,320 --> 00:02:33,120 Speaker 2: starting to work in the economy, and I think, you know, 53 00:02:33,160 --> 00:02:35,960 Speaker 2: when we look at the reserve banks outlook, we do 54 00:02:36,040 --> 00:02:38,800 Speaker 2: think that could change around the challenge of the question, 55 00:02:38,919 --> 00:02:42,040 Speaker 2: I think, and this is always the struggle. We'd also hate, though, 56 00:02:42,120 --> 00:02:44,919 Speaker 2: to start jumping sort of from one data lease to another. 57 00:02:44,960 --> 00:02:47,280 Speaker 2: So we'd hate to see a business survey out a 58 00:02:47,280 --> 00:02:49,160 Speaker 2: couple of weeks ago turn softer and then all of 59 00:02:49,200 --> 00:02:51,760 Speaker 2: a sudden everyone's like, well it's time to cut. If 60 00:02:51,800 --> 00:02:55,440 Speaker 2: inflation came in a bit hotter than expected, you know tomorrow, 61 00:02:55,560 --> 00:02:58,079 Speaker 2: you'd or equally sort of hate it if everyone then 62 00:02:58,160 --> 00:03:01,760 Speaker 2: moved back to where it's going to take longer to 63 00:03:01,800 --> 00:03:04,080 Speaker 2: cut interest rates position. So I think we're trying to 64 00:03:04,080 --> 00:03:06,160 Speaker 2: sort of hold our nerve a little bit, looking through 65 00:03:06,200 --> 00:03:08,440 Speaker 2: all the bits of dark to try and go. Is 66 00:03:08,520 --> 00:03:11,280 Speaker 2: this sort of persistent? Are we actually sort of properly 67 00:03:11,400 --> 00:03:13,880 Speaker 2: back towards the goal zone? But gosh, if we can 68 00:03:13,880 --> 00:03:16,320 Speaker 2: get to three point three, that also says that come 69 00:03:16,400 --> 00:03:18,400 Speaker 2: through to the end of this year, you should be 70 00:03:18,480 --> 00:03:21,239 Speaker 2: back within that one to three target band. If that's 71 00:03:21,280 --> 00:03:23,640 Speaker 2: the case, that certainly should give the Reserve Bank a 72 00:03:23,639 --> 00:03:26,959 Speaker 2: lot more confidence. So we're building that strong picture for 73 00:03:27,160 --> 00:03:28,480 Speaker 2: interest rate cuts at the moment. 74 00:03:28,600 --> 00:03:31,760 Speaker 1: Yeah, very good. Fingers crossed. Thanks Brad. That is Brad 75 00:03:31,760 --> 00:03:33,640 Speaker 1: Olsen from Informetrics. 76 00:03:34,720 --> 00:03:37,880 Speaker 2: For more from Heather Duplessy Allen Drive, listen live to 77 00:03:38,000 --> 00:03:38,520 Speaker 2: news Talks. 78 00:03:38,520 --> 00:03:41,720 Speaker 1: It'd be from four pm weekdays, or follow the podcast 79 00:03:41,840 --> 00:03:42,840 Speaker 1: on iHeartRadio.