I'm pretty sure I've just jinxed the global economy.

I've fixed my interest rates for three years - longer than I normally would - because in theory rates will be heading up over this period.

That's a logical decision because the US is on the up.

The US Federal Reserve has started lifting rates. In New Zealand, the Reserve Bank has the official cash rate on hold.


But the next move is expected to be up.

Regardless, local banks can't get enough deposits to cover all their lending and have to borrow more offshore at higher rates.

So mortgage rates here are expected to rise. Hence I've fixed long.

Unfortunately, I now feel like a cricket commentator who has just said Martin Guptill is looking in fine touch and is odds on for a century.

Quite how this metaphoric jinx will play out in the real world isn't clear yet. But if I had to choose I'd go with a Wall Street meltdown.

The US market is running on hope and greed and looks overdue for a correction.

But who knows when?

The financial question I'm most often asked by friends, family and colleagues is: What should I do with my mortgage rates?


I'm not a financial adviser and don't like to offer specific advice but I'll typically run through a range of plausible scenarios and then suggest people think about how much risk they like in their life.

One thing I've learned from spending time with really smart people - like central bankers, economists and stock market analysts - is there is no amount of knowledge that enables you to pick the future.

The smartest thing you can do is honestly assess your own appetite for risk and manage your money accordingly.

That's hard to do because we all kid ourselves. We all have subconscious biases and that's why external advice can be a good thing.

As a journalist I have a natural bias towards the dramatic. For example, given two scenarios in which the stock market falls by 5 per cent, I'm naturally far more interested in the one where it does so in a single afternoon than the one where it does it over a few months.

The market consensus is so strong about rates rising now that I have overcome my pessimistic bias to lock in a solid rate for a longer period - rather than chasing the best available rate for a shorter time.

We've been through a historically unprecedented period of low interest rates since the global financial crisis. And it has lingered so long that low rates have started to feel like the norm.

They really aren't. Take a look at Reserve Bank records on retail mortgage rates.

Data on the two-year fixed rate goes back to 1998 and shows the average was 7.02 per cent.

Floating rate data goes back to 1964 and clocks in at an average of 9.9 per cent.

That is largely due to crazy days at around 20 per cent in the 1980s, although floating rates were also in double digits as recently as September 2008.

My new three-year rate at just over 5 per cent is looking pretty good.

But still I have that nagging doubt.

We've been on the brink of a rate recovery at least twice since the GFC and each time it has been reversed by an external shock.

We had the great oil slump of 2014, which sucked inflation from the global economy and caught our Reserve Bank off guard. It raised rates twice and then had to backtrack in 2015.

Then last year a Chinese market meltdown and the UK Brexit spooked the US Federal Reserve, which wimped out on rate hikes it had planned.

Now the Fed is moving US rates up again. And even though the US economy is looking stronger, Wall Street is getting silly.

Investors have piled in on what were already record highs on the assumption Trump will stimulate the US economy by cutting taxes and building roads.

The Dow Jones is up 13 per cent in the four months since Trump was elected. Both the S&P 500 and the Dow Jones indexes have both now gone more than 105 days without falling more than one per cent.

By that definition it's the longest winning streak since 1995, according to financial website MarketWatch.

Overall the US market's "bull run" is into its eighth year, the second longest in history. The Trump effect has been like throwing petrol on a bonfire that was already looking dangerously large.

If the new President can engineer a steady, sustainable recovery and US stock values rise at a more modest pace there's a chance some balance and equilibrium may return.

But: Donald Trump, steady, sustainable, modest, balance ... I don't want to get too political so I'll let readers choose the odd one out on that list.

Maybe he'll be able to keep talking things up for a while yet.

Or perhaps he'll just be deeply ineffective and the US will truck on regardless.

For three years? I'm not usually superstitious but I'm touching wood.