Will the real Reserve Bank governor please stand up
The decision, to be delivered on Tuesday afternoon, appears to be a foregone conclusion. As of Friday, a 25-basis-point rate cut to 3.6 per cent was almost entirely priced in by the money market. After a handful of late call changes, just three out of 35 economists surveyed by The Australian Financial Review were brave enough to disagree.
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West Australian
an hour ago
- West Australian
Jackson Hewett: Is the RBA going to cut rates? Trump's tariffs raise economic risks
The Reserve Bank is highly tipped to cut interest rates at 2.30pm on Tuesday and not just because local spending is soft or inflation's easing. As the RBA Board enters the second day of deliberation, they'll be sweating on US President Donald Trump's fresh round of tariffs including 25 per cent on key Australian trading partners Japan and Korea. A messy, drawn-out trade war was a key concern at the last RBA meeting in May, something Assistant Governor Sarah Hunter said could 'structurally alter the world economy'. At its last meeting, the RBA ran through a bunch of scenarios: one where things stay mild, one where the worst is avoided, and one where a full-blown trade war sends everything south. That worst-case scenario includes higher prices for imports, broken supply chains, nervous businesses pulling back on investment, and a hit to confidence across the board. With components of complex goods like cars sourced across multiple countries, the danger is tariff-induced bottlenecks, pushing up prices at the same time as global demand is going soft. That's the kind of squeeze central banks hate: weak growth and rising costs. And then there's the uncertainty. It's not just what tariffs are in place, it's the fact that no one knows what's coming next. 'There is ample research showing that higher uncertainty can lead to declines in investment, output and employment,' Ms Hunter said in June. When things are this unpredictable, businesses sit on their hands. Some of the market reaction to Trump's tariff spree has eased since April's collapse, but the RBA knows it won't take much for investors to get spooked again, and that could feed straight into tighter financial conditions here. The RBA has enough evidence to suggest Australia needs an interest rate shot in the arm. The Commander Chaos in Chief has thrown a new layer of concern into the mix.
ABC News
5 hours ago
- ABC News
Markets live updates: Reserve Bank expected to cut interest rates for third time in 2025
Markets are pricing in a more than 90 per cent chance of a 0.25 basis point interest rate cut when the Reserve Bank board hands down its decision at 2:30pm AEST today. Follow the day's financial news and insights from our specialist business reporters on our live blog. Disclaimer: this blog is not intended as investment advice.
The Age
5 hours ago
- The Age
Australian News LIVE: Inside the mushroom murderer court case, new Trump tariffs; rate cut decision looms
Latest posts Latest posts 6.56am Alex de Minaur's Wimbledon campaign ends in disappointment By Marc McGowan Australia's hopes of a Wimbledon win have been toppled after Australian Alex de Minaur's loss to Novak Djokovic. With Roger Federer watching from the royal box, Australia's perennially underestimated tennis torchbearer returned to Wimbledon's centre court for the showdown he was supposed to have 12 months ago – and fell agonisingly short. Read how it played out here. 6.47am Are rate cuts coming? Australia awaits RBA decision By Millie Muroi and Shane Wright All eyes will be on the Reserve Bank this afternoon with RBA governor Michele Bullock expected to deliver its fastest cut in interest rates since the early days of the COVID-19 pandemic. On a $600,000 mortgage, a rate cut on Tuesday would be worth $100 a month and take to $300 the monthly savings since the Reserve Bank started easing monetary policy in February. However, not all economists are convinced the RBA will cut rates on Tuesday. Betashares chief economist David Bassanese said the bank could wait until the next quarter inflation report, due to be released at the end of the month, to get a better handle on how the economy was performing. Read our full story here. 6.38am This morning's top stories at a glance By Emily Kowal Good morning and welcome to today's national news blog. My name is Emily Kowal, and I will be taking you through today's top stories. It's Tuesday, July 8. Here's what is making news this morning. It's the case that gripped the world and now Erin Patterson has spent her first night behind bars after she was found guilty in the mushroom murder case. Our reporters take you inside the evidence we couldn't publish during the trial, including the moment Erin Patterson lost her cool, and where the unlikely murder weapon was found. In the United States, US President Donald Trump has unveiled a raft of new 25 per cent tariffs. Find out which countries are impacted here. It's (likely) rate cut day, with the Reserve Bank poised to deliver its fastest cut in interest rates since the early days of the COVID-19 pandemic. NSW Police will drop some of the charges laid against former Greens candidate Hannah Thomas after a review found officers incorrectly sought to use extraordinary emergency powers introduced to quell major riots.
