Imminent OCR Cut

Gerald Mullaney

7 April 2025

Its of the main view that, the OCR will be cut by 25 basis points on the 9 April 2025.

That view is a safe and boring take no chances view.

With the economy and now the stock market, on shaky grounds for the time being, the view may more likely be a 50 basis point cut on the 9 April 2025 currently 3.75% this would bring the OCR to 3.25% by the 9 April 2025.

Having a longer view, the netural rate as indicated by the RSBNZ could be as low as 2.50%.

Therefore there is a way to go, to get the OCR rate down, low enough to stimulate the economy.

A slower projectory is possible as the RBNZ will not want to stimulate or cause property prices to assend to higher levels.

Mid year, is the view, to a possible low in the cycle, however the trend is down.

Any thought about fixing would occur mid 2025 however inflation needs to be carefully monitored as any increase in inflation could cause the RBNZ to stop reducing and may even cause it to increase the OCR.

Therefore, keeping an eye on inflation, is critical in the next two to three months, to secure a great retail interest rate.

War in the Middle east.

What can it mean

Gerald Mullaney

28 March 2025

The Ukaraine war is all but over, with the fine detail being worked out between America and Russia as at 28 March 2025.

A peace agreement maybe in force by mid 2025 between America and Russia with Russia taking Ukaraine.

America looks like its going to withdraw form NATO creating a huge vacumn between Europe and Russia causing panic in Europe as Europe is exposed and not prepared for any intending war.

This has cause billions to be appropriated to the military complex therefore creating a boom for the military complex, factories and job creation in this area.

With the war in Ukaraine coming to a peaceful solution should mean plenty of oil, gas and rare earth minerals being shipped to America there is the possibility that fuel price will trend down this will be great news for the economy.

The only problem that usually happens. if there is a forth coming shock, like a full war in the middle east this usually causes consumers to stop spending, this in turn makes it hard for business, jobs can disappear thus causing people to lose their jobs and income.

If the war was prolonged the main risk is loose of job, loose of income and the inability to service the huge debt.

The instability in Europe, Ukaraine and the middle east does come with risks.

It is of the view that, expanding and taking on debt, in these unstable times may not be a very good strategy.

Already going into 2025 it being reported that good tenants are hard to find this can result in vacancies and then reduced cash flow.

Stay cashed up, making sure a good stash of cash in the bank to cover and reduced cash flow period for six to 12 months will protect investments from a bank forced sale.

This is a time to play it safe therefore being enabling one to hold any investments until the storm is over.