Ask Me Anything about the week to June 17
Bernard Hickey is on site for an hour until 1pm to shoot the breeze with paid subscribers about the events of the week, including moves by the RBNZ and ECB to unwind and stop their money printing
TLDR: It’s that time of the week again where I’m on site to shoot the breeze with paid subscribers about the week that was for an hour from midday. I do this every Friday and it’s one of our most popular features.
This week the five things of note I’ve been focused on include:
the US Federal Reserve’s 75 basis point hike in the Federal Funds Rate to 1.5-1.75%, which prompted a sharp drop in global stocks;
the ongoing Gib crisis, including Fletcher Building’s defence of its 95% market share and its belated attempts to import new supply;
increasing signs that recessions are coming later this year in the United States and Europe (and possibly here too) because of the demand destruction from a real wage deflationary shock and the fastest monetary policy tightenings since the Volcker era;
the ongoing fall in house prices in Aotearoa-NZ because of higher interest rates, which is now in double-digits in Auckland and Wellington, and headed for 20% according to some bank economists; and,
the growing prospect the Government will have to extend its 25c/litre fuel levy cut as oil prices and refining margins keep rising.
Paid subscribers can fire away in the comments below.
Hi Bernard,
Do you find it difficult to resolve the paradox (hopefully this is the right word🤞) between our need to stop using fossil fuels to help solve our climate crisis and our obsession with fossil fuel costs?
Kia ora Bernard,
Not sure if this data exists, but if it weren't for the housing market, would NZ have already been in a recession given that was our only real economic activity during COVID anyway?
Second question on housing - is there likely to be any assistance for recent first homebuyers who will be under the pump from rising interest rates? I shudder to think of a family that scrapped together their savings to put a 10% deposit down on a $1mil+house in Auckland now getting wacked with a rising 10% deposit rate - I have no idea how they could manage now. Not that their plight is a as bad as those locked out of the market entirely, but given the government was sending signals that it was going to do nothing to reign in out of control housing prices surely it owes this group some assistance?