Mike's Minute: Who I'd have for the Governor of the Reserve Bank

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Recorded28 Jul 2025

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Can I suggest Jarrod Kerr for Governor of the Reserve Bank? Jarrod is Kiwibank's Chief Economist. He has been completely consistent in his ongoing commentary around interest rate cuts and the Reserve Bank's need to do more. To be fair, our own Greg Smith at Devon Funds Management has told us, and argued, a similar story. The Kiwibank economic report that got a decent amount of coverage over the weekend is Jarrod's - proof positives that he is right and Adrian Orr and Christian Hawkesby have been, and are, wrong. As long as they continue to be myopic and look at nothing but inflation they can argue two things. 1) It's in the band, even though it's dangerously close to not being, and will most likely breach it this year, 2) This ongoing, but increasing false, idea that they have cut enough and the efforts of that will flow through eventually. We are virtually in August and the 25 points cut in the latter part of this year that's supposed to be lift off is nothing of the sort and the Kiwibank report confirms it. It tells us what we know already - the further south you go the better it is. But here is the real news; even in the best, most lucrative, optimistic part of the country i.e Otago and Southland they only get 5/10. A half mark is as good as it gets. The rest of the country is miserable. Are there signs? Yes, but how long do you want to squeeze the economic lemon looking for juice? Dairy, meat and kiwifruit - all the stuff we have talked about, and celebrated, is not only doing the heavy lifting; it's doing almost all the lifting. Tourism is there in Otago. But its still only 86% of what it was six years ago. Confidence is hard to find, foreigners still can't buy a house when they invest millions, and for every dollar you get from lower interest rates you pay $2 more for your power and insurance and rates, which have become the new version of highway robbery. The economy needs help. It needs a major enthusiast, it needs a circuit breaker and the Reserve Bank and their view and actions are potentially it. Jarrod sees it, Greg sees it, John Key sees it and wants a full 100 points drop. But until anyone of them is Governor, we rely on Christian and his committee and that is where the problem lies. LISTEN ABOVESee omnystudio.com/listener for privacy information.

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