OCR can wait until September

14 May 2010 at 15:22 PM
http://www.johnwalley.co.nz/93-ocr_can_wait_until_september.aspx

Can anyone tell me where the inflationary pressure is in our economy?

A few bits in over the last day or two:

Employment still soft and contracting, our survey www.realeconomy.co.nz, core retail spending, bank profits, house sales, food prices all going south, more finance company failures and rental availability going up, real actual manufacturing sales on a par with 2009 (which was a disaster) – people feel better but on what basis?

Is there any real case for a OCR hike in June? Where is the inflationary pressure or is at matter of pride to have the highest interest rates in the world and our crown is lost to Australia?

People I talk to are feeling better, but employment is still contracting year on year (no tricks with seasonal adjustments) and it is domestic sales holding up volumes and export volume are still down on last year (helps with currency impact I guess) but the strong a dollar on what’s left is negative for sales and margin. The economy is soft and we are hoping for better but better is still somewhere in the future.

Can’t think why the mainstream / bank economists / RBNZ are talking up the OCR or maybe I can….

OCR can wait until September

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