23/07/2025
FACT: On July 9th the Reserve Bank of New Zealand held the official cash rate steady at 3.25%
Opinion: On the July 9th the Reserve Bank of New Zealand made another policy error.
The first one occurred in the second half of 2020 - dropping the OCR to 0.25% and keeping it here for almost 18 months!
Some argue the RBNZ has played it right. I’m not so sure. In my view, they created inflation with their policy settings, which hit asset prices first, then consumer prices next. It was a mistake they'd like us to forget. I won’t, because I see families hurting every week, in real pain, while those making the calls remain distant, untouchable, and “data dependent.”
I believe they should be cutting rates deeper and faster.
Worried about inflation being too high? Fair question, but let’s be honest: imported commodity prices and government spending aren’t easy for the OCR to control.
Afraid cutting rates just triggers more inflation? Possibly. But with momentum slowing, are we really sure keeping rates high is the safer bet? And is anyone factoring in what AI-driven job losses are already doing to the real economy?
I don’t want to pretend to have the answers, but I’d be careful not to swallow everything we’re told. Open debate beats blind faith, every time.
Extended rant available here:
When Process Trumps People. There’s a special kind of regret that comes only after you’ve made a parenting call that would make your own mother shake her head. Picture this: a holiday, a bit of nostalgia, and a couple of shiny metal cap guns for the kids (because, of course, the best souvenirs a...
