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Speaker 1: It is ocr day today. Economists, well, I mean, take

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Speaker 1: your pick. Some say one thing, some say another ASB

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Speaker 1: predicting a cut of twenty five basis points B n

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Speaker 1: Z Kiwi Bank also think that they will cut a.

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Speaker 1: N Z isn't ruling out a cut that's sitting on

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Speaker 1: the fence, isn't it? Westpac and Kievi Bank think rates

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Speaker 1: will be held. John Karen is a Jardin economists, investment strategist,

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Speaker 1: and crystal ballgazer. He's with us this morning.

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Speaker 2: A John, Yeah, Good morning, Ryan.

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Speaker 1: What are you picking?

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Speaker 2: Cut?

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Speaker 1: Hold, engage? What's he going to do?

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Speaker 2: Look on we're erring on the side of a hold today.

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Speaker 2: It is a close run thing, though, and we can

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Speaker 2: see that through the disparity of views we're seen.

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Speaker 1: How important is the language that's used around the decision.

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Speaker 2: I think it will be incredibly important. I mean, this

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Speaker 2: is a full monetary policy statement out today, so this

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Speaker 2: will have refreshed forecasts or predictions from the Reserve Bank,

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Speaker 2: and I expect that although they may hold today, they

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Speaker 2: will signal that interest rate cuts are coming very soon,

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Speaker 2: much sooner than they previously indicated.

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Speaker 1: What will that mean for mortgages If they signal cuts

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Speaker 1: are coming. Do mortgages rates drop?

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Speaker 2: Yes? I think they will because what happens is the

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Speaker 2: banks anticipate cuts down the track, and particularly for those

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Speaker 2: fixed term interest rates, the one and two year, three

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Speaker 2: year rates, you will see most likely some cuts to

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Speaker 2: those rates, even if the Reserve Bank stays on hold,

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Speaker 2: but signals that cuts are coming, perhaps as early as October.

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Speaker 1: Okay, well that sounds promising. We'll have to wait and see,

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Speaker 1: obviously for two pm this afternoon. Asb reckons that we're

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Speaker 1: effectively under three percent inflation now, I mean obviously there's

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Speaker 1: a time lag with data, et cetera. Do you agree

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Speaker 1: with that?

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Speaker 2: Yeah, I think I do agree with that. There is

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Speaker 2: a very clear that inflation is coming down. Then even

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Speaker 2: the Reserve Bank admits that they'll be within their one

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Speaker 2: three percent target bend by the third quarter of this year,

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Speaker 2: so you know, it's it's quite clear, and people are

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Speaker 2: expecting that two inflation expectations are coming down and they

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Speaker 2: are expecting things to ease off further.

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Speaker 1: All right, John, thanks so much for your predictions. Hold

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Speaker 1: from from John, but expecting some language softening around cuts

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Speaker 1: later this year. John Karen is the Jardin economist and

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Speaker 1: investment strategistic.

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Speaker 2: For more from news talks. There'd be listen live on

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Speaker 2: air or online, and

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