This week saw the first OCR cut since 2020 - and to be honest it's a relief that this is happening now and not later. Only 3 months ago the reserve bank governor, Adrian Orr, was talking about a possible hike in the OCR (this now seems completely absurd) & cuts only happening next year, as late as August '25.
This major turn-around has clearly upset many - not for the fact that it was the right thing to do and had to happen - but because we rely on the reserve bank governor to provide accurate and timely signals. It shouldn't be a game of cat & mouse. People have been re-fixing their mortgages based on this advice, and some people have been caught out by the side-step. Perhaps some people wouldn't have jumped the ditch if they knew that some welcome financial relief was coming sooner than later. Some businesses might have decided to hold on for a bit longer rather than closing shop. Real people, real consequences. An economy in dire need of some good news.
Some have gone so far as to say you can't trust Adrian. Clearly, he's not stupid, but eating a bit of humble pie wouldn't hurt. Clarity & certainty are what people, and the market, wants more than anything.
So, suddenly we have the first cut with more on the near horizon. Interest rates are coming down folks. It's been a while since anything has got cheaper.
Good news for business, anyone with a mortgage, those trying to buy their first home. We may not like the delivery, but we do like interest rate cuts.
Comments