1 00:00:00,160 --> 00:00:01,920 Speaker 1: Twenty three to eight, one more time for the Interim 2 00:00:02,000 --> 00:00:04,280 Speaker 1: Reserve Bank governor twenty five points. It was cash rate 3 00:00:04,320 --> 00:00:06,680 Speaker 1: of two point two five a general sense, the job 4 00:00:06,720 --> 00:00:09,000 Speaker 1: has done, the rates are low, inflation will come down further, 5 00:00:09,080 --> 00:00:12,280 Speaker 1: and those green shoots of twenty six can prosper. Christian 6 00:00:12,320 --> 00:00:15,680 Speaker 1: Harksby's were this morning today. If this broadly is it, 7 00:00:16,720 --> 00:00:18,759 Speaker 1: and you want to bring back boring and boring does 8 00:00:18,840 --> 00:00:21,840 Speaker 1: come back, how would you assess your committee's handling of 9 00:00:21,880 --> 00:00:23,400 Speaker 1: this whole exercise? 10 00:00:26,000 --> 00:00:28,400 Speaker 2: What's the which exercise, the whole. 11 00:00:28,240 --> 00:00:31,840 Speaker 1: Year of exercise, the large number of cuts, the commentary, 12 00:00:32,000 --> 00:00:32,879 Speaker 1: all that came with it. 13 00:00:34,920 --> 00:00:38,160 Speaker 2: We've been playing, you know, playing the wats in front 14 00:00:38,200 --> 00:00:41,720 Speaker 2: of us, an economy that was in recovery at the 15 00:00:41,760 --> 00:00:45,680 Speaker 2: beginning of the year, stalled in the middle, and you know, 16 00:00:45,840 --> 00:00:49,960 Speaker 2: just responding that through time according to what it means 17 00:00:49,960 --> 00:00:53,960 Speaker 2: for our inflation mandate and our inflation target. We I think, 18 00:00:53,960 --> 00:00:59,040 Speaker 2: in particular, the fifty basis point cut in October was 19 00:00:59,080 --> 00:01:01,680 Speaker 2: really designed to as a shot in the arm to 20 00:01:01,720 --> 00:01:06,840 Speaker 2: get rid of that excessively cautious mindset and businesses and 21 00:01:06,840 --> 00:01:11,000 Speaker 2: households and really kickstart the recovery, which we're confident is 22 00:01:11,040 --> 00:01:12,920 Speaker 2: happening through the second half of this year, and that 23 00:01:13,000 --> 00:01:17,440 Speaker 2: will continue on into next the fifteen. Things running at 24 00:01:17,440 --> 00:01:20,160 Speaker 2: about a three percent annualized race at the moment. 25 00:01:20,319 --> 00:01:23,039 Speaker 1: The fifty percent cut came off the back of course, 26 00:01:23,080 --> 00:01:24,680 Speaker 1: of nothing in the middle of the year. Was the 27 00:01:24,800 --> 00:01:26,880 Speaker 1: nothing the no move? Was that a mistake? With the 28 00:01:26,880 --> 00:01:28,119 Speaker 1: benefit of hindsight. 29 00:01:29,319 --> 00:01:31,839 Speaker 2: We were worried through the first half of this year 30 00:01:32,000 --> 00:01:35,520 Speaker 2: about inflation expectations and just living in that world where 31 00:01:35,600 --> 00:01:38,920 Speaker 2: inflation had been quite high recently and just how much 32 00:01:39,000 --> 00:01:41,679 Speaker 2: that was going to linger. So that had been an 33 00:01:41,800 --> 00:01:44,720 Speaker 2: upside risk right through the course of the first half 34 00:01:44,720 --> 00:01:46,960 Speaker 2: of this year. I think in the second half that 35 00:01:47,000 --> 00:01:49,360 Speaker 2: has abated and given us more confidence that we can 36 00:01:49,840 --> 00:01:52,200 Speaker 2: get rates lower and get on with things. 37 00:01:52,400 --> 00:01:55,080 Speaker 1: The lack of response to the stimulation, and once again 38 00:01:55,080 --> 00:01:57,160 Speaker 1: talking about pretty much the whole year, this whole journey, 39 00:01:58,120 --> 00:02:00,880 Speaker 1: did you overcook your belief in the power of a 40 00:02:01,000 --> 00:02:03,559 Speaker 1: cut or are we just in a funk and nothing 41 00:02:03,560 --> 00:02:04,800 Speaker 1: you could do was going to shift us. 42 00:02:07,120 --> 00:02:09,040 Speaker 2: It is a little bit of a puzzle. I mean 43 00:02:09,160 --> 00:02:12,440 Speaker 2: that New Zealand has has struggled a bit more than 44 00:02:12,480 --> 00:02:14,880 Speaker 2: other countries through this middle part of the year. Some 45 00:02:14,919 --> 00:02:18,360 Speaker 2: of it's through you know. Some of it's because of 46 00:02:18,400 --> 00:02:23,440 Speaker 2: the global tariff, you know, situation in uncertainty. Some of 47 00:02:23,480 --> 00:02:26,920 Speaker 2: it is just caution, you know, and that's why we 48 00:02:27,040 --> 00:02:30,679 Speaker 2: really needed that sort of kickstart through October and to 49 00:02:30,800 --> 00:02:31,760 Speaker 2: the end of the year. 50 00:02:32,080 --> 00:02:34,560 Speaker 1: Yeah, the five to one vote, who's the one. 51 00:02:36,160 --> 00:02:38,040 Speaker 2: Not disclosed? Was it? 52 00:02:38,120 --> 00:02:38,200 Speaker 1: You? 53 00:02:40,400 --> 00:02:41,480 Speaker 2: Not disclosed? 54 00:02:41,960 --> 00:02:45,240 Speaker 1: Why not? Because I'm finding the FED fascinating as I'm 55 00:02:45,280 --> 00:02:47,640 Speaker 1: sure you are. I know what the FED thinks and 56 00:02:47,680 --> 00:02:50,200 Speaker 1: they talk about it publicly. Wouldn't we be better off 57 00:02:50,280 --> 00:02:51,160 Speaker 1: if you guys did that. 58 00:02:52,840 --> 00:02:55,160 Speaker 2: I think we're probably on a pathway to do that, 59 00:02:56,320 --> 00:03:00,400 Speaker 2: to be especially the external members of the NPC. You know, 60 00:03:00,440 --> 00:03:04,080 Speaker 2: it was quite restrictive on them initially. It's more permissive 61 00:03:04,520 --> 00:03:07,440 Speaker 2: now for them to get out and talk. Prisana guy 62 00:03:07,480 --> 00:03:10,880 Speaker 2: who's one of our externals, has been out talking more often. 63 00:03:11,000 --> 00:03:13,200 Speaker 2: I think that's probably the direction of travel. There will 64 00:03:13,240 --> 00:03:16,200 Speaker 2: be more from the different members. We need to be 65 00:03:16,280 --> 00:03:19,400 Speaker 2: careful though, because you know, I look at places like 66 00:03:19,440 --> 00:03:21,320 Speaker 2: the UK and the US and you have all these 67 00:03:21,360 --> 00:03:25,160 Speaker 2: different members in different corners, and you know, they're really 68 00:03:25,200 --> 00:03:28,240 Speaker 2: fighting their corner. They're not listening to each other and 69 00:03:28,240 --> 00:03:31,360 Speaker 2: sort of trying to work towards the best best outcome, 70 00:03:31,400 --> 00:03:33,520 Speaker 2: and you get places like the UK where you have 71 00:03:33,639 --> 00:03:36,480 Speaker 2: three ways splits between different members. And what do you 72 00:03:36,560 --> 00:03:37,920 Speaker 2: make of that if you're in the market. 73 00:03:38,080 --> 00:03:39,840 Speaker 1: Yeah, well, at least you know though, don't you. 74 00:03:41,520 --> 00:03:43,640 Speaker 2: Well doesn't really give you a good sense of the 75 00:03:43,720 --> 00:03:44,800 Speaker 2: direction of travel of. 76 00:03:44,840 --> 00:03:47,400 Speaker 1: The well, it gives you the same that everyone's disagreeing 77 00:03:47,440 --> 00:03:47,960 Speaker 1: with each other. 78 00:03:49,880 --> 00:03:51,520 Speaker 2: That's one thing you can take from it. 79 00:03:51,840 --> 00:03:54,119 Speaker 1: Now, the Q two Q three thing that you talked 80 00:03:54,120 --> 00:03:56,880 Speaker 1: about yesterday I found fascinating. I am told there's a 81 00:03:56,920 --> 00:03:59,480 Speaker 1: fairly significant revision in some way, shape or form coming 82 00:03:59,480 --> 00:04:01,880 Speaker 1: to Q two. Is that your understanding it? If it is, 83 00:04:01,920 --> 00:04:05,320 Speaker 1: what's it revised to? Ish? 84 00:04:05,600 --> 00:04:10,120 Speaker 2: It's not that Q two will be revised or I mean, 85 00:04:10,400 --> 00:04:13,160 Speaker 2: it may be revised, but it's more sort of a 86 00:04:13,240 --> 00:04:16,800 Speaker 2: timing issue that there are seasonal you know, there could 87 00:04:16,800 --> 00:04:19,080 Speaker 2: be some revision there, but there could also be some 88 00:04:19,120 --> 00:04:23,360 Speaker 2: seasonal adjustments as well. Such that's kind of Q three 89 00:04:23,400 --> 00:04:26,400 Speaker 2: and particularly Q four gets bumped upright and kind of 90 00:04:26,400 --> 00:04:30,000 Speaker 2: looks probably bigger than it really is as an underlying number. 91 00:04:30,120 --> 00:04:32,200 Speaker 2: So yeah, there's a lot of noise in that Q 92 00:04:32,320 --> 00:04:34,880 Speaker 2: two number. But even if you strip it out. We 93 00:04:34,960 --> 00:04:40,720 Speaker 2: still think the economy contracted through that period, but going forward, 94 00:04:41,320 --> 00:04:43,960 Speaker 2: much more confidence about Q three and Q four being 95 00:04:44,720 --> 00:04:45,040 Speaker 2: on the. 96 00:04:44,960 --> 00:04:47,279 Speaker 1: App in a calendar year, then we're going to get 97 00:04:47,760 --> 00:04:49,359 Speaker 1: some decent growth, aren't well. If you go back to 98 00:04:49,400 --> 00:04:51,600 Speaker 1: Q one, revise up Q two a bit, even if 99 00:04:51,600 --> 00:04:53,680 Speaker 1: it's negative, Q three looks solid and for metrics had 100 00:04:53,760 --> 00:04:56,800 Speaker 1: zero point nine. Q four looks Okay, that's growth, isn't it. 101 00:04:58,560 --> 00:05:01,479 Speaker 2: I mean modest over the calendar year. If you look 102 00:05:01,520 --> 00:05:04,920 Speaker 2: over the second half the year, we think you're at 103 00:05:04,960 --> 00:05:08,560 Speaker 2: a run rate of getting up towards three percent over 104 00:05:08,640 --> 00:05:11,360 Speaker 2: that final six months, which, as you say, is a good, 105 00:05:11,839 --> 00:05:14,120 Speaker 2: good run rack to have, and it's something we need 106 00:05:14,160 --> 00:05:16,040 Speaker 2: to have because we've got a lot of spare capacity 107 00:05:16,400 --> 00:05:18,240 Speaker 2: in the economy. I've got a lot of headroom and 108 00:05:18,240 --> 00:05:22,599 Speaker 2: that's partly why we've been cutting interest rates to close 109 00:05:22,680 --> 00:05:23,200 Speaker 2: that gap. 110 00:05:23,640 --> 00:05:25,320 Speaker 1: All right, do you Christian? This will be the final 111 00:05:25,360 --> 00:05:27,200 Speaker 1: time we talk unless you're going to be a politician 112 00:05:27,279 --> 00:05:29,120 Speaker 1: or something. Are you heading off overseas? Have you got 113 00:05:29,120 --> 00:05:30,200 Speaker 1: a new job, what are you going to do? 114 00:05:31,680 --> 00:05:34,120 Speaker 2: I am focused. I've been focused on getting to the 115 00:05:34,120 --> 00:05:36,560 Speaker 2: finish line and the role that I'm in at the 116 00:05:36,560 --> 00:05:38,880 Speaker 2: moment and then just have a really long and good 117 00:05:38,920 --> 00:05:43,720 Speaker 2: break over the summer wearing a T shirt candles shorts 118 00:05:43,720 --> 00:05:44,560 Speaker 2: for as long as I can. 119 00:05:44,720 --> 00:05:46,720 Speaker 1: Were you disappointed you didn't get the big job. 120 00:05:48,960 --> 00:05:52,400 Speaker 2: I'm excited about doing something different. I've been on the 121 00:05:52,400 --> 00:05:56,080 Speaker 2: Monetary Policy Committee for seven years now. I've done forty 122 00:05:56,240 --> 00:06:00,800 Speaker 2: nine meetings, forty nine decisions at time to do something else? 123 00:06:01,040 --> 00:06:03,919 Speaker 1: And what are your observations of doctor Emma Breman. Is 124 00:06:03,920 --> 00:06:04,960 Speaker 1: she going to be a rock star? 125 00:06:06,600 --> 00:06:09,600 Speaker 2: I think she'll be great. I've had six meetings with 126 00:06:09,800 --> 00:06:15,000 Speaker 2: her as part of the sort of induction and handover. Yeah, 127 00:06:15,080 --> 00:06:15,880 Speaker 2: she'll do a great job. 128 00:06:15,920 --> 00:06:18,000 Speaker 1: I'm sure good stuff and I wish you very best 129 00:06:18,040 --> 00:06:21,599 Speaker 1: for the holiday season. Christian hawksby the Well almost airs 130 00:06:21,640 --> 00:06:25,520 Speaker 1: of Monday, the former Interim Reserve Bank Governor. For more 131 00:06:25,560 --> 00:06:28,680 Speaker 1: from the Mic Asking Breakfast, listen live to news talks. 132 00:06:28,680 --> 00:06:31,880 Speaker 1: It'd be from six am weekdays, or follow the podcast 133 00:06:31,920 --> 00:06:32,800 Speaker 1: on iHeartRadio.