Give us a call: (09) 486 4719
btn book free consultation

Blog

Email me when new posts are made to this blog

Where will interest rates go?

February 19th, 2016.

This is going to continue to be an interesting but volatile discussion in 2016 with many indicators both at home and overseas suggesting that there could be more downward movement.

Locally the agriculture market took another hit with the fourth consecutive auction having falling prices related to milk powder, and a survey released by the Reserve Bank showed that inflation expectations have dropped markedly which will increase predictions about further OCR drops.

On the flip side of this I read an interesting article referring to comments made by the ANZ NZ CEO and the ANZ Group CEO where they have both been quoted saying that wholesale funding costs have increased by about 30 basis points since August last year.

This is happening in a world where many Central Banks are offering negative interest rates (yes that is right, negative interest rates, i.e effectively a charge for storing money with them). So far these charges are being absorbed by trading banks and not passed onto consumers but it does make one look at the World differently. If customers were to start being penalised effectively for putting money into the bank instead may we have a World where customers are not encouraged to pay in advance? Everything could look very different such as companies looking to make their payments quickly and receive them more slowly.

If you are interested have a read HERE for how things could end up looking.

With fears starting to return about another GFC with overseas lenders shares tumbling this could see an increase in funding costs if there continues to be a lack of trust in the financial system.

A recent article from THE ECONOMIST shows that there is still a large way to go before some countries dig themselves out of the financial hole they are currently in.

In short I would be predicting the short term rates to drop further but I still think having some certainty locked in is a good option in a World with so much uncertainty still around.
 
As always if you want to have your interest rates reviewed please just email us HERE and we’ll be in touch to see if there are any benefits in restructuring.
 

Comments

GET IN TOUCH FOR FREE, NO-OBLIGATION ADVICE ON YOUR NEXT INVESTMENT

“ *As a rule, we advise that you contact us as early as possibly to secure the most suitable time for your consultation.
Product Query

First Name*
Email*
Phone
 

CONTACT US

Kris Pedersen Mortgages Limited
 
+64 9 486 4719
+64 9 486 4711 (FAX)
info@krispedersen.co.nz

Skype: Kris_Pedersen    
Takapuna Office
 
388 Lake Road
Takapuna
Auckland 0622
Newmarket Office
 
Level 6
135 Broadway
Newmarket
Auckland 1023
Postal Address
 
PO Box 33650
Takapuna
Auckland 0740