The Kākā by Bernard Hickey
The Kākā by Bernard Hickey
Dawn Chorus: Orr lacks regrets

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Dawn Chorus: Orr lacks regrets

RBNZ Governor says has no regrets about unconventional monetary policy moves; ridicules talk of housing market catastrophe and says monetary policy can't be driven by first home buyers who miss out

TLDR & TLDL: Reserve Bank Governor Adrian Orr was dismissive yesterday of talk of a “catastrophe” in the housing market for renters and first home buyers over the last 18 months, saying he had no regrets about the use of unconventional monetary policy to support the economy in last year’s Covid Crisis.

Orr made the comments in his news conference after the Reserve Bank hiked the OCR by 25 basis points, which was less than some in the market expected, but forecast another seven or eight 25 basis point hikes over the next two to three years. (See more below on his comments and my thoughts below the paywall fold)

Elsewhere overnight and this morning:

Judith Collins may - or may not - still be National leader by the end of the day. Photo: Lynn Grieveson/TheKaka
  • National Leader Judith Collins ignited a firestorm in her caucus last night by demoting Simon Bridges from all his roles because of a comment made about a fellow MP five years ago.

  • Bridges’ supporters, Mark Mitchell and Simon O’Connor, said they were “blindsided” by the “stitch up” and called on Collins to resign for being “disrespectful” to the National caucus.

  • Bridges described the move as a “desperate act”. A leadership contest or change is expected at a caucus meeting today;

  • Thomas Coughlan reported in the NZ Herald this morning the Labour Govt would soon propose a Social Unemployment Insurance scheme to pay newly unemployed people 80% of their income for a limited period, which would be funded by an ACC-style levy of 1-2% on employees and a similar amount on employers;

  • The NZ dollar fell to a three-month low of 68.5 USc in the wake of yesterday’s 25 basis point rate hike here, which was less than some expected, and ongoing strength in the US dollar on talk of faster US rate hikes next year; and,

  • US jobless claims and personal consumption expenditure data released overnight showed the jobs market there was the healthiest in decades, but that inflation was also at its highest levels since the 1990s. US stocks wobbled around yesterday’s closing levels and longer term interest rates nudged slightly higher.

  • Later today, I’ll be trying not to notice the National caucus’ conniptions (many other press gallery journalists are very busy this morning…) and keeping an eye on the Social Insurance Scheme progress. Here’s my backgrounder on the idea from May.

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