Borrowing costs to banks unusually high at the moment
One of the more interesting things in the wholesale money markets at the moment is that swap rates have risen so far they imply an...
Monetary policy to tighten before it loosens again
the fixed rate costs to banks of borrowing money to lend at fixed interest rates have soared in recent weeks. That is why we are s...
Monetary policy tightening already in place
Over nearly 3 years the OCR increased from 5.0% to 7.25%. But the 3-year fixed mortgage rate barely increased. Contrast that with the current situation of this rate rising 1.8% the past six months while the Reserve Bank’s cash rate has gone up only 0.5%.
Fixed rate hikes reflect market expectations
Mortgage interest rates have now risen by between 1.3% and 1.8% from where they were less than six months ago as banks have reacted to sharp increases in their cost of funds.
Soaring inflation raises mortgage rate risks
For quite a few months now my central theme with regard to interest rates has been fairly clear. Inflation risks are rising, the Reserve Bank will tighten, and chances are they will tighten by considerably more than people are comfortably thinking.
Interest rates on an upward march
The long-awaited monetary policy tightening cycle has now kicked off in New Zealand as the need for record low interest rates to combat feared effects of Covid-19 has disappeared, and the need to fight rising inflation has soared.