Economic Commentary
13 December 2024
The November quarter was again a positive one, proving a continuation of what has been a strong 12 months.
Both the NZ Reserve Bank and the US Federal Reserve are in the process of reducing Official Cash Rates, which is part of what is expected to be an ongoing cycle of cuts over the next year or so. This is against very different economic backdrops, with the US economy continuing to do well whilst NZ remains in a deep slump. Generally, a declining interest rate environment is positive for portfolios, helping sharemarket performance and bond prices, and we have seen this effect over recent months. The US election produced a clear result, and we now await the implications for markets and the global economy as President Trump’s policy agenda is rolled out. As always, there will no doubt be a mixture of good and bad, although perhaps with a little more volatility along the way.
