The economy's a hot mess (literally) and the Herald's business editor-at-large, Liam Dann, isn't about to sugarcoat the situation.
In a live chat with Herald subscribers this afternoon, Dann noted that rampant inflation is a global issue over which central banks - including the RBNZ - have limited control.
As for homeowners? Strap in - it looks like it's going to be a bumpy ride.
That's not to say the outlook is all doom and gloom. Dann says the reopening of NZ's borders is likely to make a big difference to inflationary pressures such as labour costs.
Here's a sampling from today's Q&A.
Steve G: Do we realistically need to accept that inflation is, at least in part, a cost of Covid-19 support which although necessary pumps money into the economy without always maintaining pre-existing output levels?
LD: I think we do to some extent. We should always consider the counter factual. How would the global economy have coped without the stimulus that was injected around the world? Lower inflation and higher unemployment?
Was it overdone? Maybe with hindsight.
But there was never going to be an easy solution to the pandemic or one without consequences.
Stuart A: How much control does the Reserve Bank actually have when it comes to fighting inflation if it's a worldwide problem with so many external inputs?
LD: Sadly, I think it is limited right now. It can only influence the economic behaviour of New Zealanders and inflation is definitely a global problem right now.
Even the US Fed will struggle to get it back in the box until the pandemic and aftermath has passed.
When we are through it I remain confident that we'll see it fall in pricing as efficiencies come back to manufacturing, supply chain, etc. The tech advances that drove inflation down over the past 25 years will kick in again.
Things like getting NZ's borders open again could make a big difference to things like labour costs.
Rose W: Why has our Reserve Bank been so slow to raise the OCR? Interest has exceeded the target for some time now by a wide margin. Why have they not been doing their core role?
LD: The RBNZ has been the fastest and most aggressive in the world with rate hikes. But broadly every central bank was pushing back against economic damage of the pandemic.
I don't buy the line that they have been distracted from their core role. The occasional speech about climate change is hardly onerous.
Di Z: Do you worry that the Reserve Bank might force a recession, willingly or unwillingly, so that inflation can be controlled?
LD: I do. Although I'm confident that the Reserve Bank will be worried about it too.
Inflation really puts us between a rock and hard place in terms of policy options.
I'm hopeful the RBNZ can keep a lid on inflation with steady, moderate rate rises. I don't think central bank policy alone can beat it.
I think we'll need to get out the other side of the pandemic and see supply chains and manufacturing operations kick back into high gear.
Until then we need to keep it in check and stop it getting into a self-perpetuating spiral.
Jude R: Do you think the Government will try to ease interest rates from mid-ish 2023 as part of their election campaign?
LD: Thankfully governments can't control interest rates directly. The Reserve Bank has independence in its decision making - even though Government can set its broad policy targets.
I think the Government will be very worried about inflation and interest rates as it is politically problematic.
But the main way the politicians can have influence is through cutting spending and tightening the economy that way. So far we haven't seen any suggestion they are planning that.
Anthony W: Given that longer-term mortgage interest rates are higher than shorter-term ... does it make sense to fix now for 1 year rather than 3 or 5?
LD: I'd say yes, except I personally got caught out believing rate hikes were a done deal a couple of times after the GFC, and ended up locked in higher than I needed to be.
So yes in theory but events can change things.
One of the most important things is to factor in the level of risk and/or stability that suits your personal circumstances.
In the end across the full term of a mortgage you're probably not going to beat the bank either way.
Steve O: Do you think it's a good idea the banks are stepping in to stop home buyers, especially first home buyers, getting themselves into huge amount of debt due to over-inflated house prices? Asking on behalf of a first home buyer.
LD: I can imagine how frustrating it must be when you can't get in because everyone is worrying about big macro-economic risk. I think it's a combination of RBNZ, new Govt rules (under review) and banks' self-interest right now. It's a good idea not to have large chunks of the population over-exposed to debt right now. Which there kind of is anyway. But I hope we can get back to the days when a 10 per cent deposit was enough.
Dave L: Please explain how [the economic environment] can affect people having to renew mortgages in the next year.
LD: The short answer is you should expect mortgage rates to be higher in the next year - probably...
I say probably because strange things can and do happen.
But at this point the only way they won't be higher is if something really terrible happens like another Global Financial Crisis.
Cherie H: Bracket creep - what are the chances the current Government, or a future one on the right, will address this?
LD: Inflation increases the need to address this more regularly for sure.
I reckon National could and probably will look at it as election policy. It sometimes plays as 'tax-cut' in media so won't be high on Labour's agenda. But if they get another term I think they'll need to address it.
Janet C: Now the right are ahead in the latest polls, does this make any difference to the economic outlook?
LD: Are they? Roy Morgan poll maybe ... regardless, I don't think it does. For all the noise on the sidelines this Government's fiscal response to Covid hasn't been materially different to the Tories in the UK or the Liberals in Australia.
Rebecca P: What's the likelihood that employers will give an inflationary increase in wages?
LD: I think that will depend on the sector and how much pressure they are under to retain staff. Some sectors like IT and engineering will probably command increases above and beyond inflation. Others will struggle to command increases that match inflation.
Daniel R: Can the Govt help savers by removing income tax off savings accounts?
LD: It could. But it doesn't sound like something this Government would do.
Chris T: Would a tax cut for low- to middle-income earners be beneficial for the workers and their families? And would this help ease some of the pressures on them? Also, would reducing GST back to 12.5 per cent help?
LD: The trouble is that would be more economic stimulus and may drive demand and more inflation. Those on the right of political spectrum would argue it is a more efficient kind of stimulus and maybe would advocate in combination with spending cuts. This Government won't do that.
Richard Q: Will there be any investment that does not lose value in real terms?
LD: Well, anything that can beat 5.9 per cent per annum based on the current rate of inflation.
That's tough because equity markets are busy correcting and readjusting to higher interest rates. And there's plenty of speculation that property may follow.
To some extent it might just be a case of riding out the storm and sticking with solid investments that can offset most of value loss until everything settles.
I better add that the alternative is to chase higher returns through higher risk. I certainly wouldn't recommend that ... it seldom ends well - as per 1987 and 2008.
But people should think about and understand their own risk appetite ... that's one of the golden rules of investing.
Dee R: The Reserve Bank needs to sharply increase the OCR - probably by 50 to 75 points - almost straight away. The NZ dollar is totally undervalued by perception and as such is causing high import prices and less domestic competition - in the last two months, since November, the dollar has devalued by 7.7 per cent. Does anyone think this may be one of the major reasons petrol and all other imports are going up so quickly?
LD: It's true the NZD has fallen against the USD lately and this will add to import costs and inflation. That's because the sleeping giant - the US Fed - has woken up and is expected to finally start hiking rates from next months.
But NZ already has one of the most aggressive projected tracks for interest rate hikes in the next year.
Going harder is always an option but would put real pressure on parts of the economy.
Also, we need to be careful that policy change doesn't look like panic - which could spook currency markets and result in the kiwi being sold off anyway despite the higher rates.