The Reserve Bank's decision to leave interest rates on hold and signal a lower path for rates in coming years will be welcome news for homeowners on floating mortgage rates at least.
Interest rates now seem almost certain to stay put until at least March or maybe June next year.
However the Reserve Bank's accompanying review of the New Zealand economy makes for pretty sober reading.
Governor Dr Allan Bollard has conceded today that economic growth has moderated - due to a weak domestic economy - and that homeowners are likely to face the prospect of weaker house prices in coming months.
In fact, the only bright spot for the economy remains the strong commodity prices being enjoyed by our core export sectors of meat, dairy and forestry.
Although, Bollard notes that the high kiwi dollar is still a problem for parts of that sector and that is doing its bit to take the gloss of the export-led recovery.
Today's assessment is in sharp contrast to that which the Bank gave back in January.
Back then there were high hopes that the New Zealand economy might yet have a robust and traditional recovery. And in anticipation of that recovery, the Bank moved to hike rates twice in June and July.
Some will argue the hikes were a mistake (although Bollard rejects this) because - as we have seen - a strong or so called "normal recovery" has not yet happened.
The main problem seems to be that the strength in the export sector is not flowing through to the domestic consumer economy yet.
One reason could be that farmers are choosing to pay off debt rather than spend.
What it means is that businesses and consumers remain very cautious about their spending and that's keeping a lid on domestic demand.
Meanwhile there was plenty for the government to think about in today's statement.
Bollard joined the ranks of Treasury and credit rating agency Standard and Poor's in urging the government to make a more accelerated return to budget surpluses.
At present the government is looking to get the books back into the black by 2015.
However Bollard says a faster move to surplus and greater national savings would have huge benefits for New Zealand in the form of a lower dollar, lower interest rates and less reliance on foreign borrowings.
Now I have no doubt the National led government is sympathetic to the notion of cutting government spending more aggressively and helping Bollard out with his task of keeping inflation and interest rates down.
In fact English has hinted at more cuts coming next year.
However, it might be a bit much to think that there will be any major removal of government stimulus next year. 2011 is an election year after all.
As we like to say, watch this space...
