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Speaker 1: We get the inflation number out today, economists expecting it

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Speaker 1: to be a slight increase early estimates indicating the annual

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Speaker 1: rate to come in somewhere between two point three two

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Speaker 1: point four. Nick Toughly, chief economist today, ASP's with me.

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Speaker 2: Hi Nick, Good morning.

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Speaker 1: So even if it goes up zero point one percent,

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Speaker 1: would that be enough to worry anyone?

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Speaker 2: Look, we don't think so. What we've got happening is

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Speaker 2: is that domestic part of inflation should for quite substantially

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Speaker 2: in this quarter. But what we're seeing is is just

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Speaker 2: a little bit of a rebound in some of that

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Speaker 2: sort of traded goods inflation, which was a you felt

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Speaker 2: rather quickly last year, and we're just seeing a little

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Speaker 2: bit of bounce in things like food prices and fuel

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Speaker 2: prices went up after helping inflation come down. So we're

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Speaker 2: not too worried if he's a slight blip up. We

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Speaker 2: think it's going to be a factor that will be

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Speaker 2: here for you, say, six months or so of this year,

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Speaker 2: and inflation will settle back down, all right.

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Speaker 1: And you expecting, asps expecting that the RBNZ will oftom

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Speaker 1: out the OCR at two point seven five percent. I

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Speaker 1: see a and Z last night said two point five,

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Speaker 1: what what is the deal with mortgage interest rates? And

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Speaker 1: you know, what are the spot rates doing? Will we

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Speaker 1: see those one, two, even three year rates come down

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Speaker 1: if the ocr keeps dropping or are there other factors

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Speaker 1: at play.

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Speaker 2: Well, there is potential for those rates to come down.

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Speaker 2: I think one thing we've got to be a bit

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Speaker 2: wary of is that some of the term rates have

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Speaker 2: actually been bouncing up at times with what's been happening

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Speaker 2: in the US interest rate market. So there's a lot

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Speaker 2: of volatility at the moment. So hopefully that will settle down.

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Speaker 2: But if we get the cash rate can turn into four,

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Speaker 2: then that should help drive those who are shorter term

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Speaker 2: rates and particularly floating rates down a bit further. So

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Speaker 2: that's the thing with Donald Trump potentially driving inflation down

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Speaker 2: in the longer term a bit in New Zealand if

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Speaker 2: it's a damp and the area export earning, so that

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Speaker 2: gives a reserve bank a bit more scope to cut rates.

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Speaker 2: And then what would have been thought even just a

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Speaker 2: couple of weeks ago.

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Speaker 1: Nick, when do you reckon we'll get to two point

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Speaker 1: seventy five.

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Speaker 2: Look our viewers, if you get three more orderly quarter

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Speaker 2: percent drops. You'll get there by about August. That's if

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Speaker 2: they cut at every single meeting, But I think by

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Speaker 2: the end of this year and they have you at

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Speaker 2: the moment. You know, just trying to do any sort

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Speaker 2: of forecasting is like sort of trying to find a

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Speaker 2: black cat in the dark and the wrong house potentially

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Speaker 2: just given the impacts of Donald Trump. But that's where

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Speaker 2: we see the direction of risk coming through. The Received

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Speaker 2: Bank will respond to whatever plays out internationally and the

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Speaker 2: impacts that will have an our inflation, which is its job.

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Speaker 1: Yeah, it's a pin the tail on the donkey situation

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Speaker 1: at the moment, Nick, Thank you, Nick Tuffley, a spechief

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Speaker 1: economists with us.

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Speaker 2: For more from earlier edition with Ryan Bridge, listen live

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