Mike’s Minute: More eyes on the RB isn’t a bad thing

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Newstalk ZB

Күн бұрын

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@stevehughes1510 2 ай бұрын

Last year we were talking that Adrian Orr should go as Governor of the RB, how do we feel about that in '24 ?

@neilstuarr2278 2 ай бұрын

Still ...........go

@Gary-i9f 2 ай бұрын

Still the same ,he's an arrogant prick .

@mxvega1097 2 ай бұрын

There is still profound confusion about the causes of inflation, and therefore its remedies, in public discussion. If it's a matter of money supply, price of money and expectations, then we're talking monetary policy, and CPI as an indicator. The distraction with jobs numbers is a US Fed thing bc they have a dual mandate. Occasionally there is blithering ignorance about government spending (an affordability and outcome issue) and imports (higher prices of imports are a price signal, not inflation). Monetary policy can only solve some issues, largely to do with credit and its deployment. One thing it must be mindful of is benchmarking against USTs, and getting out of step with the bond market. If our rates are too low, capital will simply flee to the US for higher and safer yield, and unwind the yen carry in the process. The end point might be bearable, but the disruption would be huge. The RB has failed to articulate a coherent thesis on inflation and its remedies for over 5 years. That's why we have rhetorical drift from money supply, rates, jobs, housing, Rest of World Random Factor X, and trust me bro.

@hariseldon3786 2 ай бұрын

Basically agree. An additional issue is they (the Fed and the RB) don't seem to understand all the tools they have to hand... They could issue bonds at exactly the same interest rate and for the same reasons BUT they could issue bonds that are "non-taxable" - effectively increasing the yield without increasing the interest rate and all the concomitant downstream outcomes of this... Yes, it would cost the government (but going forward, say a 10 year bond) some income, but the advantages would grossly outweigh the disadvantages and effectively draw more money off the market... No such thing as a free-lunch but in this case it is a better strategy than those currently brought to bare...