Interest rates

2024 - 8 - 14

Interest Rate Rollercoaster: Fasten Your Seatbelts, New Zealand! 🎢

interest Economy - Financial Relief - Global Interest Rates - Inflation - Official Cash Rate - Reserve Bank of New Zealand - Westpac NZ - interest

Hold on tight, Kiwis! The Reserve Bank has just cut the Official Cash Rate, and the financial landscape is about to get wild! Check out the implications for you!

In a long-awaited move, the Reserve Bank of New Zealand (RBNZ) has officially slashed the Official Cash Rate (OCR) from 5.5% to 5.25%! This is the first interest rate cut since March 2020, sparking excitement across the nation as many hope for further reductions before the year wraps up. With anticipation buzzing in the air, traders are already betting on potential significant cuts ahead. This decision has stirred the financial pot, causing the kiwi dollar to tumble against both the Australian and US currencies as New Zealand braces for a possible economic slowdown in 2024.

Following the RBNZ's announcement, Westpac NZ wasted no time in passing the full benefit of the OCR drop onto its customers by reducing floating home loan and business lending rates. This could mean some relief for homeowners and businesses eager to save as costs begin to lower. Interestingly, not everyone is feeling rosy about interest rates; across the Tasman, the Reserve Bank of Australia (RBA) poured cold water on expectations of a Christmas cut, citing concerns about pushing their economy into recession too hastily. As a result, the interest rate conversation seems to have opinions as varied as the flavours of a Kiwi ice cream shop!

Meanwhile, on the global stage, the US Federal Reserve is also eyeing potential cuts as inflation appears to be easing. As prices reportedly dipped to an annual rate of 2.9% in July, the pressure is mounting for policymakers to re-evaluate their strategies. For Kiwis intrigued by refinancing options, the buzz is palpable, with applications surging by 35% last week as homeowners take advantage of the dropping interest rates. It looks like the financial tide is turning, and savvy borrowers are ready to ride the wave.

As the rate cuts begin to ripple through the economy, it’s crucial to remember that these changes are often driven by more than just financial pragmatism. Lower interest rates tend to boost consumer spending as people feel more comfortable with their financial commitments. However, experts warn about the fine balance between stimulating growth and controlling inflation. Is the OCR cut just a signal for more fun times ahead, or could it lead to a more serious economic hitch? Time will tell!

**Interesting fact**: Did you know that the OCR determines how much interest banks charge on loans? A lower OCR means cheaper loans and potentially more spending—but it also raises the eyebrow of inflation! Another fun fact: New Zealand’s OCR was last cut in March 2020, coinciding with the start of the global pandemic, marking a historical moment for the financial world that’s now wrapped in another fascinating chapter! Keep your eyes peeled, Kiwis!

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Image courtesy of "Interest.co.nz"

It's a CUT! Reserve Bank drops Official Cash Rate to 5.25% from 5.5% (Interest.co.nz)

Reserve Bank starts long awaited interest rate cuts, and is forecasting further cuts before the end of the year. It also now sees annual inflation falling ...

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Image courtesy of "SunLive"

SunLive - Will interest rates finally be cut today? - The Bay's News First (SunLive)

Photo: RNZ. Expectations are building that the Reserve Bank will cut the official cash rate on Wednesday for the first time in more than four years. Wholesale ...

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Image courtesy of "The Guardian"

Bank of England could still cut interest rates again despite rise in ... (The Guardian)

July fall in service sector and core inflation may open door for policymakers to make reduction.

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Image courtesy of "NZ Advisor"

Westpac NZ slashes floating interest rates after OCR drop (NZ Advisor)

Westpac NZ is passing on the full official cash rate reduction announced today by lowering interest rates for floating home loans, business lending, ...

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Image courtesy of "The Guardian"

The RBA poured cold water on an interest rate cut before Christmas ... (The Guardian)

It did not want to speed up the return to lower inflation at the cost of pushing Australia into recession. Both upside and downside risks meant a higher than ...

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Image courtesy of "The Australian Financial Review"

New Zealand interest rates: Traders bet on jumbo rate cuts by the ... (The Australian Financial Review)

The kiwi tumbles against both Australian and US dollar after the NZ Reserve Bank cut rates and tips the economy will fall back into recession in 2024.

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Image courtesy of "New Zealand Herald"

OCR live updates: Reserve Bank cuts Official Cash Rate to 5.25% (New Zealand Herald)

The Reserve Bank has cut the official cash rate by 25 basis points to 5.25%. It is the first cut since March 2020. STORY CONTINUES AFTER LIVE BLOG STORY...

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Image courtesy of "The Australian Financial Review"

Interest rates: CBA's Matt Comyn backs RBA on rates staying higher ... (The Australian Financial Review)

The chief executive of the largest home lender says inflation remains too high. The market is at odds with the RBA, which has all but ruled out a cut this ...

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Image courtesy of "CapX"

High interest rates are no longer serving a purpose (CapX)

On the Bank of England's target measure of inflation, the Consumer Prices Index (CPI), inflation rose slightly in the year to July, with prices up by 2.2% ...

RBNZ cuts interest rates by 25 bps citing inflation progress, weak ... (Yahoo News NZ)

Investing.com-- The Reserve Bank of New Zealand unexpectedly cut interest rates on Wednesday, citing recent progress towards meeting its annual inflation ...

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Image courtesy of "The Guardian"

US inflation dipped in July as Federal Reserve expected to cut ... (The Guardian)

Prices rose at an annual rate of 2.9% in July, as inflation dipped below 3% for the first time since 2021.

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Image courtesy of "CNBC"

Mortgage refinancing surges 35% in one week, as interest rates hit ... (CNBC)

Applications to refinance a home loan surged 35% last week compared with the previous week, according to the Mortgage Bankers Association's seasonally ...

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Image courtesy of "Sky News"

US interest rate cut likely after inflation falls (Sky News)

The annual pace of price rises in the world's largest economy fell from 3% in June to 2.9% in July, according to official figures.

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Image courtesy of "WAFB"

Home mortgage interest rates decreasing (WAFB)

The Greater Baton ...

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Image courtesy of "The Australian Financial Review"

Reserve Bank of New Zealand cuts interest rates as slumping ... (The Australian Financial Review)

Wellington | New Zealand's central bank cut interest rates on Wednesday, embarking on an easing cycle much sooner than previously indicated as the economy ...

Inflation fell in July, and interest rates could drop in September (NPR)

Inflation fell to its lowest level in more than three years in July. Consumer prices were up 2.9% from July 2023, clearing the way for the Federal Reserve ...

Interest rate decision will be like the clouds parting for Luxon (Stuff.co.nz)

Ben Thomas is a regular opinion contributor. He is a public relations consultant and political commentator who has worked for the National Party.

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Image courtesy of "Reuters India"

High interest rates have benefitted corporate America (Reuters India)

Logic suggests that U.S. companies will benefit when the Fed's interest rate-cutting cycle gets underway, because they will pay less to service their debt, ...

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Image courtesy of "Opes Partners"

Interest Rate Report Issue #4 (Opes Partners)

Get the latest on New Zealand interest rates with insights from major banks, predictions for rate changes, and analysis of the Reserve Bank's forecasts.

Inflation fell in July, and interest rates could drop in September (Connecticut Public Radio)

SCOTT HORSLEY, BYLINE: Hi, Mary Louise. KELLY: OK, so President Biden there very much claiming credit for falling inflation. What's happening? HORSLEY: Yeah, I' ...

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Image courtesy of "RNZ"

'Home loan relief coming' after cash rate cut (RNZ)

BNZ chief economist Mike Jones said there would be ongoing downward pressure on wholesale and retail interest rates. "Probably the most important implication ...

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Image courtesy of "Aljazeera.com"

US inflation slows in July, clearing way for a cut in interest rates (Aljazeera.com)

The annual increase in inflation slowed to below three percent for the first time in nearly 3.5 years.

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Image courtesy of "Marketplace.org"

The Fed controls one interest rate. How does that affect the others? (Marketplace.org)

Kelton doesn't have answers to those questions, which for some consumers depend on the levels of interest rates for auto loans, mortgages and credit cards. But ...

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