My bank has been harassing me to refix my mortgage. I've been getting reminders for a month and there is still another month to go before my current contract ends.

I'm not quite sure what the hurry is. It was only a six-month term in the first place, the whole point of which is to stay flexible.

Anyone who has been following mortgage rates will know there has been little joy for those fixing early and fixing long.

After a brief period of upward pressure following the two official cash rate rises last year, it looks like there will be no hikes this year and some economists are picking a cut as the next move - depending on how bad dairy prices and other big macro-economic indicators get.


So I'm happy to hang in there until the last minute.

In fact since the global financial crisis brought them crashing down seven years ago, rates have threatened to take off a number of times. But they just haven't.

We are living through a sustained period of low interest rates and for much of middle New Zealand this is making an okay economy feel pretty good.

United States Federal Reserve chair Janet Yellen provided some honest, down to earth commentary about rate rises over the weekend.

In the US there has been enormous speculation about when the Fed will lift the official rate from the near zero that was introduced during the GFC to some sort of new normal.

Expectations are now that rates will be lifted in June or September. Markets inevitably price in an expected path for the rises that will follow from there.

But Yellen has dismissed any suggestion of a predictable track of rises, reminding market economists of how reality seldom follows a smooth path. The return to "normal" will be gradual, she said. Rate rises won't follow any "pre-determined course of tightening".

"The actual path of policy will evolve as economic conditions evolve, and policy tightening could speed up, slow down, pause, or even reverse course depending on actual and expected developments in real activity and inflation," she said.


This might sound like stating the extremely obvious. But it is the kind of reminder markets need.

It's also sound advice for anyone watching our local economy and interest rate outlook. The Reserve Bank may talk about likely moves and future conditions, but will always change its view if the facts change.

The economy is still growing and in theory inflation should kick in later this year. But there are some shadows hanging over things. Dairy prices have dropped and the fallout will be felt as diminished payouts are made to farmers.

We seem to have escaped any large scale drought. But good, late-season production means Fonterra has more to sell and prices will stay low for a while yet.

Some highly unusual conditions have conspired to make New Zealand's middle classes feel wealthier than ever - and probably wealthier than they really are.

For the property-owning, KiwiSaving masses, it doesn't get better than soaring house prices and booming equity markets combined with low inflation or deflation.

Retirement funds are growing at record rates, house price inflation is still eating up big mortgages while interest rates remain near record lows and the cost of living is static.

You've only got to head out in Auckland on a week night to see consumer confidence - across the bars and restaurants at least.

This golden run has been prolonged and is enabling real wealth creation. But we should make the most of it because economic cycles will always turn.