Breakfast briefing: It is clearer that tariffs will drive a new global inflation surge

Economy / news

Broader US tariffs embed inflation expectations worldwide; India's 'go for growth' plan depresses its currency; some key metals rise sharply; UST 10yr at 4.49%; gold and oil up; NZ$1 = 56.5 USc; TWI = 66.8

11th Feb 25, 7:19am by David Chaston

Here's our summary of key economic events overnight that affect New Zealand with news of more signaled tariffs on imports into the US, specifically on metals. A new inflation surge seems inevitable, as does less trade and low growth - in other words we need to prepare for a new bout of stagflation.

But first, American consumer inflation expectations for the year ahead remained at 3% for a third consecutive month in January, according to the NY Fed national survey. This is far more sanguine than the University of Michigan survey we noted yesterday which reported a 4.3% year ahead level. The NY Fed survey noted that households now expect to pull back their spending in the year ahead, however.

The Musk takeover of US spending priorities is leaving many losers, including US farmers.

In Canada, a survey by their central bank of about 30 significant financial "market participants" at the end of 2024 showed that those polled expect the Canadian 3% current policy interest rate still has another -50 bps of cuts to come, but that it will level out at 2.5% from mid-year for the next long period. This survey also showed an expectation of a +1.8% or +1.9% economic growth rate over the next two years, although the largest risk to that is from policy uncertainty in the US.

And staying in Canada, falling residential values are leaving some very tough positions for buyers who bought off the plan, and now find the contract price now far exceeds what a bank would value their purchase for a mortgage.

In India, the one-two public policy push to "go for growth" with tax cuts and a lower policy interest rate, isn't getting plaudits from financial markets. They have driven the Indian currency to a record low against the USD, although it has come off that in the past few hours. (But of course some of that is due to the overall strength of the USD.)

In the face of new US tariff threats, some targeted metals prices have risen. Essentially they are pricing in the higher prices American buyers will have to pay. Aluminium is at a two year high and running at long term high levels, steel comes in many varieties, but rebar steel hasn't moved much because that has China-focused demand. Other commodity-metals are flat, but specialty metal prices are rising. And copper is back near its all-time highs suddenly at just over US$10,000/tonne (NZ$17,750). These shifts higher will underpin global inflationary impulses that no-one can avoid.

And we should probably note that the new aggressive US Gaza policies likely mean there will be no end to the risks of using the Suez Canal, extending its inflationary impact.

The UST 10yr yield is at 4.49%, down -1 bp from yesterday at this time. The key 2-10 yield curve is flatter at +15 bps. Their 1-5 curve is flatter at +8 bps. And their 3 mth-10yr curve is steeper at +23 bps. The Australian 10 year bond yield starts today over 4.43% and up +8 bps from yesterday. The China 10 year bond rate is now at 1.62% and up +2 bps. The NZ Government 10 year bond rate is now at 4.60%, down -2 bps from yesterday.

Wall Street has opened its Monday trade up +0.7% on the S&P500. Overnight, European markets all closed slightly higher. Yesterday Tokyo closed essentially unchanged. Hong Kong ended its Monday trade up +1.8%. Shanghai was up +0.6%. Singapore was up +0.4%. But the ASX200 ended down -0.3% and that was almost matched by the NZX50's -0.2% dip.

The price of gold will start today at just under US$2900/oz and up +US$40 from yesterday. This will be a new record closing if it holds this level.

Oil prices are up +US$1.50 at just under US$72.50/bbl in the US and the international Brent price is now at US$76/bbl and back to week-ago levels.

The Kiwi dollar is now at 56.5 USc and down -10 bps from this time yesterday. Against the Aussie we are down -20 bps at 90 AUc. Against the euro we are unchanged at just under 54.8 euro cents. That all means our TWI-5 starts today just on 66.8, down -10 bps from yesterday at this time.

The bitcoin price starts today at US$97,281 and up +0.7% from this time yesterday. Volatility over the past 24 hours has been modest at +/- 1.8%.

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100 Comments

by Jonny.Foe | 11th Feb 25, 7:50am 1739213410

Inflationary episode, price gouging under cover of tariffs, and 'inflation is back' stories, all the companies and shareholders gleeful as... apart from the ones selling discretionary goods that people have to stop buying.

Central banks in hero mode, gravely announcing that they need to keep the cost of doing business and the cost of living high; I mean how else do you tackle the cost of living? Gotta double the dose to kill the medicine or some such logic.

by linklater01 | 11th Feb 25, 2:01pm 1739235673

Jfoe,

All valid points, but what would happen to the property market here if the RB cuts too deeply? I think we both know the answer. What do you think the neutral rate might be?

by Foxglove. | 11th Feb 25, 7:55am 1739213741

An old cliche, between a rock and a hard place, is though accurate to NZ’s plight. The government wants lower interest rates to stimulate “growth.” Overseas the USA under Trump introduces policy that is predicted to stimulate inflation globally. Regrettable illustration of how little NZ is on the world stage but what is the RBNZ to do though. Would wager that the reductions in the OCR will continue until inflation arrives and then up it will race again. That simple theory is based on previous instances of not addressing anything in advance and instead, reacting after the event.

by murray86 | 11th Feb 25, 8:08am 1739214480

The impact of Trump's policies in the US will reverberate around the world. Chaos will be the end result for a while. Developed political denial will only delay needed reforms.

Even though we are very small in terms of the planet, our government needs to have a focus on national resilience. Trade only works for us if we have a manufacturing industry. Immigration is not growth if lower and middle class Kiwis can't afford to live. The flaws in Luxon's vision are showing, providing the opposition plenty of ammunition, but as some others have expressed, their policies are a problem too. They lost the last election for a reason and it doesn't look like they understand that yet.

The polarisation of politics is evident here in NZ too.

by Pa1nter | 11th Feb 25, 8:12am 1739214755

Even though we are very small in terms of the planet, our government needs to have a focus on national resilience.

That's kinda what Trump is attempting, although it appears it'll come at a cost. We can also follow, but will need to choose what we will forgo in order to have more indigenous supply.

But yeah, Trumps stance of "everyone sucks, here's a banstick" should be more destructive than constructive for many around the world.

by Silvi | 11th Feb 25, 9:02am 1739217745

The tariffs were Biden's or the US's stance as well. Biden did not remove Trump's tariffs and in fact imposed more. Biden did remove the steel tariffs allowed when the US won that 15 years splat and gave them a five year reprieve as I understand. As I see it our problem is our dollar and the difference between our rate and the US.

Resilence comes in different forms. Where Biden wasn't getting much pushback I sense Trump is going to face much more resistence. Macron was saying Europe has to pay for services and yet theyre not taxed. Interesting times.

by Adam B NZ | 11th Feb 25, 7:54am 1739213659

The NZ economy and property market will not react very well if later this year or sometime next year rate hikes have to start again due to more inflation.

by RookieInvestor | 11th Feb 25, 9:01am 1739217710

If i were buying a property now i would still be allowing room in the budget for 9-10% interest rates as a fall back.

by kraken | 11th Feb 25, 9:22am 1739218976

Wow, Rookie, that’s pretty bearish coming from you, sounds like something I’d say. With mortgage rates at 9-10%, the OCR would be above 6-7%. Guess you’re not planning to buy again anytime soon?

by OldSkoolEconomics | 11th Feb 25, 9:25am 1739219147

Many economists are predicting flat pricing for the housing market. And that's based on current projections.

With Ai, trade wars, climate, actual wars, etc etc the odds of a significant black swan event are huge.

Nz economy is stuttering with no vision or plan.

Thus the liklihood of a significant drop in house pricing for nz is very high.

Invest elsewhere.

by rastus1 | 11th Feb 25, 10:26am 1739222785

elsewhere being the ultimate dilemma.

by OldSkoolEconomics | 11th Feb 25, 4:37pm 1739245036

Didnt Warren say the first rule of investment is not to lose money.

So - if you subscribe to the populist view that nz property might decline in value more than you are willing to lose.. then first get out of Property.

Then work out the 'elsewhere'.. which takes a bit more nous than buying houses.... especially as the world is shifting quickly.

Personally i think the damage the elite will do to society through Ai is still massively underestimated.... and will have huge impact on peoples ability to spend and may even start to stuff up the wealth creation of its very creators

Ultimately its most likely that Ai will start to destroy too many jobs (the entire concept is totally flawed) and be banned as society votes Ai supportive governments out, or overthrows dictorial leaders. What that leaves - likely a china dominated world with heavy tech regulation - is what to invest in today

by IT GUY | 11th Feb 25, 10:26am 1739222811

its the lack of liquidity if you want to get out vs other financial assets, massive risk.

by rastus1 | 11th Feb 25, 10:29am 1739222998

10% would cause so much pain that banks would be in trouble. In rides the activation of OBR to make the savers pay....for the folly of the housing ponzi. Outcome might be pitchforks,

by Nzdan | 11th Feb 25, 11:16am 1739225806

He's just trying to sound like a money bags high roller. There's no way buying a rental property on current prices with a 60% LVR would stack up at 10% interest rates.

Rookie is rolling in money though, so he can budget to lose $10k+ p.a. per property if interest rates hit 10% because he "budgeted for it".

by kraken | 11th Feb 25, 9:55am 1739220929

"9-10% interest rates"

I'm fantasying about it, a 10% mortgage rate would mean $50K a year in interest on a $500K loan. Renting would suddenly look way more appealing as house prices tumble, especially with rental yields struggling to keep up with money markets. You’d earn more from a regular savings account than from a rental property.

by M0ralHazard | 11th Feb 25, 9:58am 1739221138

Seeing as even with a global pandemic rates didn't get that high, it seems unlikely that they would go to 9-10% any time soon

by Avalanche | 11th Feb 25, 1:37pm 1739234233

Rates were slashed during the pandemic.

by Bayview | 11th Feb 25, 9:57am 1739221038

Rookieinvestor - Very wise comment indeed !

I remember a Prophet who prophesied 10% interest rates on Mortgages.

I guess he was correct to a certain degree .

https://www.stuff.co.nz/business/money/300941816/the-home-loan-borrower…

Although The Prophet was talking about 10% from Mainstream Banks. Which got to 8.6% floating.

Sometimes Prophets can be a little off on their dates, but the Facts Still Remain, !0% is still coming.

Im sure he would apologize if he could for wrong timing. Bit hard when you are 6 feet under I guess.

Worse Late Than Never.

by Baywatch | 11th Feb 25, 10:08am 1739221688

10 points for originality with your Pseudonym?

by Bayview | 11th Feb 25, 10:09am 1739221785

You can keep watching. But I am the one with the View !

by Baywatch | 11th Feb 25, 11:06am 1739225218

Look out for Tsunami's ..they creep up on you..

by linklater01 | 11th Feb 25, 2:04pm 1739235845

Baywatch,

Look out for Tsunami's-of wrongly used apostrophes.

by Baywatch | 11th Feb 25, 8:00am 1739214058

Looks like we are being softened up for a cut in the Company's tax rate...lots of spin stories showing up recently..

by Pa1nter | 11th Feb 25, 8:08am 1739214513

That's how we incentivise active business and productivity though, innit?

by Baywatch | 11th Feb 25, 8:15am 1739214928

Sure..just a bit of a hit initially to the tax take ...couple of years? We could become the South Pacific Tiger..

by Pa1nter | 11th Feb 25, 8:13am 1739214809

I'm sure we can find something else to tax or cut back on to make up for the shortfall.

by Baywatch | 11th Feb 25, 8:20am 1739215227

Doing a good job at the moment...

by mfd | 11th Feb 25, 8:35am 1739216153

How about that interest deductibility on rental properties? Nice money spinner.

Carrot and a stick for pushing investors into something productive.

by kiwikidsnz | 11th Feb 25, 8:48am 1739216902

IIRC around 70% of NZs residential rental properties are provided by private landlords. How do you propose to maintain the stock, future population growth ?

by Baywatch | 11th Feb 25, 8:53am 1739217228

future population growth?

by Pa1nter | 11th Feb 25, 9:41am 1739220089

Yeah. NZs a migrant nation.

by Baywatch | 11th Feb 25, 10:09am 1739221747

Turning negative later this year....(my prediction)

by Pa1nter | 11th Feb 25, 10:15am 1739222150

Yeah possibly.

Forever though? Probably not.

by Rampart | 11th Feb 25, 12:47pm 1739231246

The ones with money can get out. That’ll only become harder as time passes.

by mfd | 11th Feb 25, 9:11am 1739218313

I was just proposing removal of interest deductibility for rental investors, not the wholesale destruction of rental properties.

Other investors will step in, at the right price, unless they are outbid by FHBs which is also fine in terms of getting people into accommodation.

Or if NACT are really smart maybe they could have some kind of exemption for new build properties so that rental investors are preferentially pushed into increasing housing supply?

by Averageman | 11th Feb 25, 10:30am 1739223021

At the right price. That's the crux of it isn't it.

by Averageman | 11th Feb 25, 10:47am 1739224055

At the right price. That's the crux of it isn't it.

by Clefton Twain | 11th Feb 25, 10:34am 1739223260

by allowing interest deductability on only new builds (as per the labour govt policy)

by RookieInvestor | 11th Feb 25, 9:04am 1739217863

by mfd | 11th Feb 25, 8:35am

How about that interest deductibility on rental properties?

now that KO have decided to sell off and not build as much, there may be more reliance on the private investors for housing support, maybe that was a factor in this, knowing KO was not sustainable.

by mfd | 11th Feb 25, 9:21am 1739218892

But the change that NACT made only effected existing property, new builds were still allowed to claim interest. If anything, the change will reduce the number of new builds produced by investors.

by RickStrauss | 11th Feb 25, 11:03am 1739225031

Seemingly reducing supply growth to benefit their own investments.

by Nzdan | 11th Feb 25, 11:18am 1739225895

How else do you engineer scarcity if you aren't removing incentives to add stock?

by Clefton Twain | 11th Feb 25, 10:32am 1739223175

way too logical mfd!

by JimboJones | 11th Feb 25, 8:52am 1739217168

Pa1nter we all know that decreasing corporate tax will encourage significant investment in NZ and the total tax pool will actually grow. Didn’t you do right wing economics 101?

by Pa1nter | 11th Feb 25, 9:43am 1739220220

I know that reducing corporate tax rates can juice figures superficially. If we look at Ireland, being a corporate tax Haven has done wonders for GDP, and GDP per Capita. The average Irish citizen hasn't fared as well.

by JimboJones | 11th Feb 25, 10:08am 1739221692

Ireland had more than the small tax tweak we are likely to get. It also is well located - I am not sure many companies will shift their headquarters to NZ.

by RickStrauss | 11th Feb 25, 3:08pm 1739239703

On the other hand, combining the lowering of corporate tax rates with the gradual raising of tax on unimproved land value would truly incentivise those who create value rather than take value.

And circa 70% of corporate tax is borne by employees in the form of lower salaries, so it'd benefit more NZers.

by IT GUY | 11th Feb 25, 8:11am 1739214687

Agree, I think so as well. More BS about trickle down I suspect as well.

I do think its too high to attract growth growth growth

by Silvi | 11th Feb 25, 9:03am 1739217807

15%?

by solardb | 11th Feb 25, 8:05am 1739214335

How do American tariffs effect the world price of metals. The producer is not getting paid extra, if anything they might have to drop their price, and nobody outside the USA pays the tariff.

by JimboJones | 11th Feb 25, 8:16am 1739214982

They reduce the price to the US to make up for the tariff, at the expense of everyone else. So we end up subsidising their tariff.

But I’m not convinced a few metals are going to move our CPI in any meaningful way. If anything I reckon tariffs will make our prices cheaper, especially as NZ won’t retaliate.

by Silvi | 11th Feb 25, 9:06am 1739217962

The US, through USAID and Congress have been subsidizing their farmers just saying. Just an interesting revelation from Trump stopping the aid.

Makes one wonder if Trump will repeat his bailout or US farmers?

by Foxglove. | 11th Feb 25, 8:17am 1739215059

It’s a bit of a mixed bag. Who pays the tariff can depend on whether the market needs the product more than the product needs the market. Fox example when President Clinton imposed both a tariff and quota on Australian & NZ lamb, the exporters ended up absorbing it. Those producers may in turn seek to recover that loss in revenue from other markets. That though, is putting it very simply. There are a lot of dynamics at play, product by product, market by market.

by Frank. | 11th Feb 25, 9:52am 1739220750

Ashes to ashes, dust to dust.

by HeavyG | 11th Feb 25, 9:56am 1739220992

The tariff is applied at the border so in a practical sense the importer pays the tariff. Whether the price of the imported metal is discounted by the exporter depends on price negotiations between the exporter and importer. However, the ultimate effect is the price of the metal in the USA has increased. This also means any domestic producer on non Chinese supplier now has a potential price advantage over the Chinese imported metal. This advantage also allows those other suppliers to increase prices while still now being cheaper than the Chinese imported metal = price inflation for both imports and all other metals in the economy.

E.g. China sells steel to USA company for $1,000. USA imposes 10% tariff so when imported USA company pays $1,000 to China and $100 to customs. USA producer (Aussie supplier) sells steel at $1,050, it was been undercut by Chinese suppliers but now is not only $50 cheaper but can now increase its price to $1,090 (plus $40 price increase) and still undercut Chinese supplier.

by The Person | 11th Feb 25, 12:26pm 1739230003

The steel tarrif applies to everyone, not just china. So Aussie supplier pays it too.

by HeavyG | 11th Feb 25, 12:33pm 1739230430

USA has implemented 3 country specific targeted tariffs on Canada, Mexico and China. While other countries may also pay tariffs they do not pay those imposed directly on those 3 countries. See:

https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-don…

by Pragmatist | 11th Feb 25, 3:15pm 1739240155

He backtracked on those tariffs for Canada and Mexico, and put tariffs on all steel and aluminium imports from any country

https://www.cnn.com/cnn/2025/02/10/politics/tariffs-steel-aluminum-trump

CNN —

President Donald Trump on Monday imposed a 25% tariff on all steel and aluminum imports into the United States with no exceptions or exemptions.

by HeavyG | 11th Feb 25, 3:52pm 1739242351

Trust me to choose one of the only two metals which the rules changed yesterday to use in my example. Wasn't really the point I was making in my original response, if people change steel to copper in my example it will still work I presume. Cheers.

by HouseMouse | 11th Feb 25, 9:00am 1739217648

It’s all feeling quite early ‘90s to me

by redcows1 | 11th Feb 25, 9:09am 1739218196

Said that last year. Hated the nineties , total trashing of what was left from Lange Douglas. Every time the dollar looked to slide and exporters breath a sigh of relief Brash would push interest rates up .

by HouseMouse | 11th Feb 25, 9:48am 1739220510

Yeah

It’s perhaps ‘91. Years of mediocre economic performance ahead. And a shit National-led government

by Pa1nter | 11th Feb 25, 9:44am 1739220254

I've got some old flannel shirts and a Pearl Jam singlet if you need.

by HouseMouse | 11th Feb 25, 9:46am 1739220385

Haha

didn’t like Pearl Jam, but it was a golden era for music for sure

by Pa1nter | 11th Feb 25, 10:16am 1739222208

Radiohead came and saved the mid 90s

by redcows1 | 11th Feb 25, 10:28am 1739222895

Really?

Shihad and Supergroove amongst a good number of kiwi bands dragged the nineties towards the new century.

by mfd | 11th Feb 25, 11:33am 1739226817

With the sheer volume of music produced these days if you're not finding stuff you like, it's because you're not looking.

I know the metal scene is absolutely thriving, some fantastic releases in the last year and some great Kiwi bands doing the rounds.

by Chaosinflesh | 11th Feb 25, 12:44pm 1739231050

I still have (and regularly wear) my 1990 14th Commonwealth Games' Queen's Baton Relay t-shirt.

Ah, CCC, they just don't make 'em like they used to.

by dollar_bill | 11th Feb 25, 5:26pm 1739247963

1890's

by kiwikidsnz | 11th Feb 25, 9:14am 1739218496

"...My opinion is that lobbying has featured in this announcement. It smacks of a dirty deal whereby local Fund Managers have got around the PM to make this change - so they can slice commissions off their managed funds by telling offshore clients that now an NZ passport will be thrown into the party bag. The PM has trashed the integrity of our passport. These portfolio funds do not constitute direct investments - they bring no technology or skills, contrary to Immigration Minister Stanford's fake assertions - and NZ already has no problem attracting them."

PM Luxon Trashes the NZ Passport. His Investor Visa Announcement is a Con-Job as NZ already has 4th highest level of Net Foreign Investment in OECD.

by blobbles | 11th Feb 25, 9:53am 1739220811

Yes, stupid move, pretending to do something. If they really want to do something, throw out the FIF tax, which collects little in revenue, but stops big investors moving here very quickly.

Again, tax system reform is needed. Instead we get pollies doing the wrong thing and pretending its right. Doesn't matter what colour they wear.

by M0ralHazard | 11th Feb 25, 9:15am 1739218504

NZ mortgage rates Facebook page has BNZ app for 2yr at 5.09%. Interesting seeing as the commentary was that the Westpac 4.99% 3yr was "unsustainable"

by Toye | 11th Feb 25, 9:21am 1739218889

RIP rate cutting cycle in the US and soon, here.

by Richardfromauckland | 11th Feb 25, 9:33am 1739219587

How long before Luxon is rolled? Being pushed around by his coalition partners, but still only able to trot out some pretty tired lines. Standford could be a future leader. Hopefully Crusher realises her time has passed.

by Time Lord | 11th Feb 25, 9:41am 1739220112

Luxon's strategy is to repeat the word 'growth' until it magically becomes reality

by Foxglove. | 11th Feb 25, 10:11am 1739221883

Likely too early but she would get my vote. Protege of McCully though, an expert on machinations, so for better and worse she should at least know how to navigate the political seas. Otherwise, should Winston call it a day, she would be an excellent foreign minister.

by Frank. | 11th Feb 25, 10:00am 1739221215

What I don’t get, is how the National Party ever selected him to be their leader in the first place. As soon as they were even looking to go with Luxy I told anyone who’d listen that it would come back to bite them. It just shows how incompetent the Labour Party was in that he pushed through to become Prime Minister. So the moral of the story is, they’re all wankers and central government needs to be abolished.

by Foxglove. | 11th Feb 25, 10:10am 1739221813

Hard truth in that. What’s worse it seemed to be, for both major partiesin selecting new leaders, Luxon & Hipkins, there was no contest, no alternative on offer. That does demonstrate an extremely shallow talent pool doesn’t it.

by redcows1 | 11th Feb 25, 10:40am 1739223627

I don't disagree on the shallow talent pool but none of the parties like to have a drag em down beat em up a fight for power. All we get is limp sound bites that tell us nothing. Though tbf that is what they will do when I power. There is such a fear of being seen to be in any way not in tune with current centerist thinking. I hate Trump, but that unwillingness to fight has left a big hole for him to fill.

by kiwikidsnz | 11th Feb 25, 10:14am 1739222044

Remember where National were coming from at the time...several years of dross - Bridges, Muller, Collins.

Along with internecine incompetence and squabbles under Goodfellows party presidency

by JimboJones | 11th Feb 25, 10:27am 1739222871

Their polling went up the instant Luxon became leader, they were unelectable beforehand.

by IT GUY | 11th Feb 25, 12:19pm 1739229540

I do not think they would roll unless he loses an election to Labour and left.

Then I think he would resign anyway, on the night.

Both sides lack a credible plan, one will develop but that will not happen while NZ

clings to the belief that property will bounce back to life and boom again.

by E46 | 11th Feb 25, 10:28am 1739222887

I think Bridges would of gotten a better result at the last election tbh.

by Foxglove. | 11th Feb 25, 10:53am 1739224420

Bridges went too early. Usually the leader in opposition in the first term doesn’t last too long and National soon revealed some pretty unsavoury elements in their make up and that blew onto him. Ironically he now sounds and appears much more assured and credible.

by Richardfromauckland | 11th Feb 25, 10:41am 1739223689

The shallow talent pool comment is spot on. They thought Luxon was the second coming of John Key, but in reality if there was someone a bit stronger they could have probably given him a push. He obviously runs a tight ship (his sometimes churlish/short media persona is probably amplified behind closed doors) otherwise the old National would have had more leaks by now.

I know there are a lot of Act supporters on here, but Seymour's another one losing focus (other than focusing on distractions). His dpm stint will be interesting.

by RickStrauss | 11th Feb 25, 11:06am 1739225174

Temu John Key, as it were.

by Yvil | 11th Feb 25, 10:01am 1739221284

Because of Trump's tariffs, the USD is soaring, hurting most other countries. Maybe it's time for all countries to threaten Trump to join BRICS to precipitate the downfall of the USD, if Trump doesn't pull his head in.

by Baywatch | 11th Feb 25, 11:12am 1739225541

That's how the crush other nations with their reserve currency status...

by General Comment | 11th Feb 25, 11:18am 1739225924

I have entertained the notion of a world where that happens. The US is looking to poop on its own allies, so why should they show loyalty? 95% of the world don't live in the US, I can't think of anything tangible the US has a monopoly on if one ignores the global reserve currency, and I'm sure BRICS would have some very favourable trade and finance agreements ready to go to get the ball rolling.

Toys would be thrown/fired/launched/dropped, of course.

by RickStrauss | 11th Feb 25, 12:23pm 1739229827

Putin's master plan? The return on investing in Trump would be stellar.

by The Man3 | 11th Feb 25, 11:43am 1739227395

To be discussing that interest rates for mortgages could touch 10% is just delusional and shows how many really do not know what they are talking about.

There would be so much blood on the floor and so many living in the streets, , as landlords with mortgages are not going to be housing anyone.

by IT GUY | 11th Feb 25, 11:48am 1739227691

We are more likely to see a negative OCR before 10% IMHO.

by RickStrauss | 11th Feb 25, 12:24pm 1739229892

All must be sacrificed to the great property Baal.

by JimboJones | 11th Feb 25, 12:17pm 1739229445

Yeah even a move back to 7% mortgage rates would destroy the economy.

But you end up with a scenario similar to Turkey or Venezuela - you can’t afford higher rates but you can’t afford hyperinflation either.

by interesting1234 | 11th Feb 25, 12:44pm 1739231057

If inflation resurged, 7% interest rate mortgages would mean nothing in comparison to the large increases everyone would have to pay for the bare essentials - food, clothes, transport etc. As harsh as the reality is, people can afford to lose a house, but they cannot afford not to eat.

by Chaosinflesh | 11th Feb 25, 12:57pm 1739231855

Not according to an associate of mine, who berated the rest of us for being unwilling to pay higher prices for food so that interest rates could drop and they could afford their mortgage payments.

Of course, the mortgage unaffordability was all about the interest and had nothing to do with extending the mortgage an extra 20-30% buying toys on the house during low rates...

by interesting1234 | 12th Feb 25, 6:46am 1739295979

Classic, deflecting their own anger at themselves as they're not willing to admit they made poor choices. Seemingly a more common trait in todays world

by kraken | 11th Feb 25, 2:54pm 1739238850

"To be discussing that interest rates for mortgages could touch 10% is just delusional...

There would be so much blood on the floor and so many living in the streets..."

"You'll own nothing and you'll be happy" is a phrase from 2018 predictions for 2030 published by the World Economic Forum, cited as being based on input from members of the World Economic Forum Global.

2030 is just around the corner, with plenty of time for more tariffs.

by RickStrauss | 11th Feb 25, 3:12pm 1739239952

"You'll own nothing and you'll be happy"

Also our approach to housing, tax, and economic policy for younger generations.