Rates to peak soon says bank

Tuesday 28 September 2004

Economic growth has almost certainly peaked and interest rates may do the same soon, says Deutsche Bank.

By The Landlord

But the peak in rates may prove to be a plateau, such is the strength of domestic inflation.

The economy grew 0.9 per cent on the June quarter, to be 5.7 per cent larger than in June last year.

But Deutsche Bank's fixed income strategist David Plank says that unless it grows 1.7 per cent or more in the current quarter - which seems unlikely - that is likely to be the peak of the annual growth cycle.

Since the Reserve Bank introduced the official cash rate five years ago turning points in the growth cycle have been followed by turning points in interest rates with a much shorter lag than in the 1990s.


"You can probably say that rates are pretty close to their peak, but it is hard to argue they are going to come down any time soon," Plank said.

Read More - Opens in a new window
Commenting is closed

Property News

The new face of the NZPIF

There’s been a changing of the guard fronting the NZ Property Investors Federation (NZPIF), with the current president taking over as executive officer from Andrew King.

House Prices

Regions lead the price growth pack

Provincial markets stole the asking price spotlight from the main centres in January, according to the latest Trade Me Property Price Index.

Commercial

Headwinds for the commercial market

Tightening credit conditions could impact on New Zealand’s booming commercial property market, according to the Property Council’s chief executive.

Site by PHP Developer