Finance Minister Grant Robertson expects new Reserve Bank Governor Adrian Orr to review the bank's modelling that currently shows unemployment cannot go any lower without generating an inflation surge. Bernard Hickey reports.
In today's email we find a landmine for the incoming Reserve Bank governor to defuse.
The old guard still running the Reserve Bank are in no mood to cut interest rates, but new Governor Adrian Orr will face pressure from the Government and some economists to cut when he arrives in just over six weeks as inflation remains stubbornly at the bottom end of the bank's target band.
The Reserve Bank faced questions from a Government MP today about why it couldn't cut interest rates to drive unemployment even lower. It argued in response further rate cuts could inflate the housing market again and it preferred interest rate stability to taking a risk that inflation could reappear.
The Acting Governor of the Reserve Bank, Grant Spencer, has warned households to prepare themselves for higher interest rates in the future.
Adrian Orr worked as a truck driver in his youth growing up among Polynesian families in Taupo and squatted in council flats in London as a student. He's now set to be a fresh type of Reserve Bank Governor. Bernard Hickey reports.
Finance Minister Grant Robertson has accepted a recommendation from the Reserve Bank board that current New Zealand Superannuation Fund Chief Executive Adrian Orr become the next Governor of the Bank when acting Governor Grant Spencer retires at the end of March.
In today's email we looked in detail at a landmark speech by acting Reserve Bank Governor Grant Spencer.
Reserve Bank Governor Grant Spencer was at pains yesterday to portray his slight relaxation of Loan to Value Ratio restrictions as no 'green light' for home buyers and bankers to jump back into a market about to boom again.
The Reserve Bank has announced it will slightly relax its Loan to Value Restrictions (LVRs) on owner occupiers and rental property investors from January 1 because of a moderation in house price inflation.