- Gerald Mullaney
- 22 minutes ago
- 2 min read
How bad will Govt and Reserve bank allow it to go before there is a an unintended collapse in Auckland, Wellington.
Will the rebalance be achieved so the economy can move into it upward cycle in 2026
As Auckland and Wellington have collapsed and its worsening all for a good reason referred to as rebalancing.
The Govt & RBNZ has to rebalance to achieve a boom from 2026.
Help is on the way with a low imminent for Feb 2026 possibly earlier.
How ever things are so bad there are more calls now for the OCR to be cut to 2%
OCR IS CUT 20 August by 00.25 REACHING OCR 3.00%
OCTOBER CU 00.25 REACHING OCR 2.75%
DEC is where it gets a bit tricky. The RSBANK may have reached panic mode by Dec 2025 and it is possible the RBNZ WILL cut by 00.50 reaching 2.25% by Dec.
If that does happen we may see a further cut of 00.25 reaching 2.00% by Feb 2026
The polls by Dec may indicate a Labour led govt is on the way this will panic the coalition therefore by Dec we should see the GOVT AND RBANK IN PANIC MODE MOST CERTAINLY AT THE LATEST Feb 2026.
In the finally year of this election cycle the govt will not worry about inflation it will worry about being re elected therefore inflation may rise but nothing will be done about it until after the election in NOV 2026
Therefore low OCR now has a clear pathway and won't be impeded by higher inflation,
The critical element here is that the terminal low may only last days or weeks as the view is inflation could go higher in 2027.
Therefore when the low interest does appear one needs to be very alert as a low is coming but also a high is coming soon after and could go to over 7%
This next cycle looks for a low in the four to five year term as inflation is going to get real ugly in late 2026 and certainly going into 2027.
The calm is on its way for a very short term then the storm is coming therefore lock low long term when one see a low rate.