US Fed rate up +0.25% to 1%, no rollback of QE; US CPI up to 2.7%; Holland votes; AU property investors face big rate hikes; ANZ & Westpac accept ASIC sanction; UST 10yr yield at 2.54%; oil and gold up; NZ$1 = 70 US¢, TWI-5 = 74.4

the markets did not dip on the rate rise which is telling me that they had priced in.
will be watching for our banks to jump rates min 10 basis points very quickly

Mortgage Interest rates in NZ will continue to trend higher, regardless.
.
The political climate is accommodative to rates inching upwards now, which will be exploited.
Also, no signs of any customer/borrower backlash so rates will keep slowly, stealthily climbing.
Floating at 6.5 at least, by end of 2017.

If TPP is going ahead without US then i hope we are dropping the Mickey Mouse extension of copyright protection to life of author+70 years.

Perhaps the sytemic risk caused by lending to property investors is finally being recognised, and banks will need to provide higher risk weights to such lending.
Perhaps in its review of capital requirements, the RBNZ will make a distinction in its risk weighting requirements between lending for investors and lending for owner occupiers.
Perhaps the RBNZ might actually take some actions to contain rampant credit growth driven by property investors.
- Hah! Yeah right.

I wonder what fireworks will occur when the Fed has higher rates than our OCR.

American consumer inflation is now up to +2.7% pa in February according to data out today. That puts the 'real' official benchmark rate deep in negative territory.

Hmmmmm....

Outside of energy, rising rent prices continue to be the primary plague upon consumer finances. The rent component of the CPI rose 4.2%, the sixteenth time over the past eighteen months where the annual change was 4% or more (and the remaining two months were just less than 4%). At the peak of the housing bubble, rental prices according to the CPI’s version of them increased at a better than 4% for a total of nineteen months to early 2008. In the early 2000’s, it was for twenty-five.

The difference between those prior periods and the current one is wages. Now, unlike before, wages and earnings are growing at about half the rate that rents are. This disparity is usually only found during periods of recession, a painful reminder of the underlying weakness in the real economy and the imbalances that remain.

If we subtract the contributions of rental prices from the CPI, in the services category, we find first no trace at all of the four QE’s and six years of ZIRP, leaving instead the same underwhelming economic trend exhibited almost everywhere else outside the unemployment rate. There is a conspicuous lack of price momentum at the baseline.

Instead, price increases of late have been focused entirely where consumers can least afford them – gasoline and rent. The lack of economic acceleration now combined with the exact “wrong” kinds of inflation (not that there is ever a “right” kind or level) are significant what Ben Bernanke would call “headwinds.” Read more

I'm prepared to bet $1'000 that the Fed won't raise rates 6 times over 2017 & 2018

Not all price increases are created equal.

Goldman Sachs Group Inc. raises questions about the success of the efforts by the Federal Reserve and its peers to spark inflation in the wider economy with a chart showing what’s happened with prices in the largest developed economies since the start of 2009.

A replication of their analysis shows a big spread in gains: graphic evidence

While wages would never show swings on par with the likes of high-yield bonds, the chart does illustrate how well financial markets recovered from the 2007 to 2009 meltdowns. By contrast, consumer price inflation, incomes and other such gauges of the “real” economy have put in muted performances. For politicians, the chart sums up the frustrations that have helped propel the populism that Brexiteers and Donald Trump rode to victory. Read more

W.R.T. the Dutch election , even if Geert Wilders gets most votes , he is unlikely to be able to form a Government , because all the centre- left parties are unwilling to work with him .

Its interesting how Europe has swung to the right , the baby boomers and generations following them have never lived through a war and its depravations , and have only seen European economies at their zenith .

People who were born in 1939 are almost octanagerians , with many living alone in frail-care facilities with little or no influence in politics .

My take is that many are Western Europeans fed up with the problems with migrants from eastern and southern Europe and the middle east , who have failed to assimilate , are often unemployed and a burden on social welfare , and are responsible for petty crime and gang related violence .

Not to mention being fed up at having been told they must stop serving pork in school lunches .

Post FOMC news conference:

GDP is tracking very low. Measures of labor compensation are not threatening to boost inflation any time fast. The consumer is not picking up very much. Fiscal policy, we don't know what's going to happen with Donald Trump. And yet, you have to raise rates now. So what is the -- what is the motivation here? The economy is so far from your forecast in terms of GDP, why does the Fed have to move now? What does this signal, then, about the rest of the year?

Yellen frowned awkwardly and began...

So GDP is a pretty noisy indicator. Read more

Sorry Winnie...wont be voting for you.
https://nz.news.yahoo.com/top-stories/a/34662757/nz-first-opposes-1080-…