Back-to-back rate cuts tipped when Reserve Bank meets
The central bank's monetary policy board meeting, which begins on Monday, tops the week's economic agenda, although Donald Trump's tariffs could once again roil markets.
The US president paused his sweeping "liberation day" tariffs for 90 days to allow extra time for individual countries to negotiate a better deal.
But with only three agreements struck - with the UK, China and Vietnam - it's unclear what the White House will decree when the tariff deadline expires on Wednesday, US time.
ANZ Bank economists Bansi Madhavani and Brian Martin said it was likely the deadline for countries involved in negotiations would be extended, with US Treasury Secretary Bessent signalling he expected more deals to be wrapped up by September 1.
"In the unlikely event that reciprocal tariffs are fully implemented or expanded, we expect downside risks to US growth and upside risks to inflation to intensify," they said.
But CBA chief economist Luke Yeaman said there was a high risk Mr Trump could lose patience over the slow progress of negotiations and simply reinstate unilateral trade tariffs.
"Depending where he sets that (tariff) rate, he could set off another round of quite significant market volatility in the July/August period," Mr Yeaman said.
Given the backdrop of ongoing economic uncertainty and following a softer-than-expected start to the year for the Australian consumer, markets have almost fully priced in a 25-basis-point rate cut from the Reserve Bank on Tuesday.
Weaker-than-expected retail sales figures released on Wednesday convinced ANZ's head of Australian economics, Adam Boyton, to join the other big four banks in bringing his rate cut prediction forward to July.
While economists are less certain than the market that there will be a cut, almost nine in 10 surveyed by comparison website Finder agreed a reduction was on the cards.
Independent economist Saul Eslake was one of 30 economists surveyed who predicted a rate cut, with just four expecting the Reserve Bank to hold the rate steady at 3.85 per cent.
"Underlying inflation is now below the mid-point of the target band and for what it's worth, headline inflation is only just above the bottom of the target band and economic growth is still sluggish, so there is no need for monetary policy to be as restrictive as it still is," Mr Eslake said.
A cut of 25 basis points would save the median mortgage holder with a $600,000 debt about $90 a month on interest repayments.
More than three-quarters of the economists surveyed also predicted another rate cut in August, which would bring the cumulative reduction to 100 basis points since February and represent the sharpest easing of monetary policy in more than 12 years.
With Wall Street closed on Friday for Independence Day, investors were left to consider the impact as President Trump signed a sweeping spending bill into law.
The S&P 500 gained 51.94 points, or 0.83 per cent, to finish Thursday at 6,279.36. The Nasdaq Composite gained 207.97 points, or 1.02 per cent, to 20,601.10 and the Dow Jones Industrial Average rose 344.11 points, or 0.77 per cent, to 44,828.53.
Following the close, the House narrowly approved Trump's signature bill, which would add $US3.4 trillion ($A5.2 trillion) to the nation's $US36.2 trillion debt.
Australian share futures were steady, finishing at 3,175 points.
The benchmark S&P/ASX200 index finished Friday up 7.2 points, or 0.08 per cent, at 8,603.0 while the All Ordinaries climbed 8.3 points, or 0.09 per cent, to 8,841.9.
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West Australian
an hour ago
- West Australian
Slade Brockman: More regulation would strangle WA gas industry and Australian economy
It is no coincidence that Labor's default response to a gas supply crisis has always been the same tired three-card trick. First, blame the previous government. Then blame the market. Lastly, regulate, regulate, regulate. If it moves, tax it. If it keeps moving, regulate it. The WA gas industry is one of the greatest economic success stories in modern Australian history — built here, by us, with no handouts, no apologies and minimal bureaucracy. In the past, while the Eastern States drowned in red-tape and ideology, WA quietly powered ahead. Our gas sector was made possible by bold leadership, not red tape interference from Canberra. The Brand and Court Liberal governments, from the late 1950s and into the 1980s, had the foresight to back this industry, not stifle it. They unlocked the vast resources of our State and set the foundation for WA to become the economic engine room of the nation. This wasn't achieved through over-regulation or endless reports and reviews. It was achieved by risk-takers, backed by massive private investment, and enabled by governments smart enough to get out of the way. In oil and gas especially, companies faced decade-long lead times, volatile markets, and complex offshore challenges — and they still delivered for our State and our nation. They poured hundreds of billions into the WA economy, built world-class infrastructure, and attracted generations of skilled workers. Woodside — now one of Australia's most important energy companies — was born of that pro-development environment. And our WA gas industry pays its way. In 2023, Woodside alone paid $5 billion in taxes and levies. Since 1984, the North West Shelf Project has returned over $40 billion in royalties and excise — including approximately $18b to WA — all while creating thousands of high-wage, long-term jobs. This is a success story built not on regulation but on vision, genuine enterprise and belief in the future. Sadly, the creeping tendrils of regulation have slowly wrapped themselves around the WA industry, making the future far less certain than it should be. According to the Government's own regulator, AEMO, WA could face gas shortages as early as 2028, with a real risk of shortfalls by 2030. Unbelievable. And what's Chris Bowen's solution to this? More regulation. More intervention. More of what caused the problem in the first place. That's his clever answer to government-induced shortages! Ideologically-driven governments and inner-city Eastern States think-tanks have been targeting the very industry that powers our nation — literally gaslighting Australians while their own States struggle to keep the lights on. They demonise gas while depending on it. They regulate it to strangle the industry out of existence, all the while pretending that renewables alone will fill the gap. Let's be blunt: if Labor's current policies had been in place in the 1970s, there would be no gas industry, no iron ore boom, no royalties, and no economic powerhouse in WA today. And if we let that short-sighted regulatory approach win, the next wave of economic development will never come. Just more red tape, more shortages, more excuses. Eastern States Labor governments have been strangling their own industries, banning new gas projects, and driving up energy costs — while hard working Australian families pay the price. WA cannot afford to import their failure. We cannot afford to be governed by the same timid, regulatory mindset that has left the east coast short of gas and long on excuses. The future demands more energy — not less. And cheaper, more reliable energy at that. Whether it's mining critical minerals, growing the service economy, or hosting power-hungry industries like advanced manufacturing and artificial intelligence, energy is not optional. It is the foundation for prosperity. WA was built on hard work, courage, and the freedom to develop. That formula has never let us down. We don't need more regulation. We need to defend what works. Less interference, more development. That's how we keep the lights on, and our future bright. Slade Brockman is a Liberal Senator for WA
The Advertiser
an hour ago
- The Advertiser
US to announce several trade deals within days: Bessent
The United States is close to clinching several trade deals ahead of a July 9 deadline when higher tariffs kick in, US Treasury Secretary Scott Bessent says, predicting several big announcements in coming days. Bessent told CNN that US President Donald Trump's administration would also send out letters to 100 smaller countries with whom the US does not have much trade, notifying them that they would face higher tariff rates first set on April 2 and then suspended until July 9. "President Trump's going to be sending letters to some of our trading partners saying that if you don't move things along, then on August 1 you will boomerang back to your April 2 tariff level. So I think we're going to see a lot of deals very quickly," Bessent said. Bessent denied that August 1 was a new deadline for negotiations. "We are saying this is when it's happening. If you want to speed things up, have at it. If you want to go back to the old rate, that's your choice," he told CNN. Kevin Hassett, who heads the White House National Economic Council, in an interview on CBS offered some wiggle room for countries engaged in earnest negotiations. "You know, the United States is always willing to talk to everybody about everything that's going on in the world," he said. "There are deadlines and there are things that are close, and so maybe things will push back past the deadline," Hassett said, adding that Trump would decide if that could happen. Stephen Miran, chairman of the White House Council of Economic Advisers, told ABC News that countries needed to make concessions to get lower tariff rates. "I hear good things about the talks with Europe. I hear good things about the talks with India," Miran said. "And so I would expect that a number of countries that are in the process of making those concessions ... might see their date rolled." The US Treasury chief said the administration was focused on 18 important trading partners that account for 95 per cent of the US trade deficit. But he said there had been "a lot of foot-dragging" among countries in getting closure on a trade deal. He declined to name countries that were close to a trade agreement, adding, "because I don't want to let them off the hook". Trump has repeatedly said India is close to signing a deal and expressed hope that an agreement could be reached with the European Union, while casting doubt on a deal with Japan. Thailand is aiming to reduce its $US46 billion ($A70 billion) trade surplus by 70 per cent within five years in a bid to avert steep US tariffs, Finance Minister Pichai Chunhavajira told Bloomberg News on Sunday. The US has threatened to impose a 36 per cent levy on imports from Thailand if a reduction cannot be negotiated before July 9. Thailand is pushing for a best-case rate of 10 per cent, Pichai told Bloomberg, adding that even a range of between 10 per cent and 20 per cent would be acceptable. Pichai expects to submit the revised offer before July 9, the report said. Since taking office, the US president has set off global trade turmoil that has up-ended financial markets and sent policymakers scrambling to guard their economies, including through deals with the US and other countries. Trump on April 2 announced a 10 per cent base tariff rate and additional amounts for most countries, some ranging as high as 50 per cent. The news roiled financial markets, prompting Trump to suspend all but the 10 per cent base rate for 90 days to allow more time for negotiations to secure deals but the process has proven more challenging than expected. That period ends on July 9, although Trump early on Friday said the tariffs could be even higher - ranging up to 70 per cent - with most set to go into effect on August 1. Bessent, asked about the 70 per cent rate, referred back to the April 2 list but that did not include such high rates. The United States is close to clinching several trade deals ahead of a July 9 deadline when higher tariffs kick in, US Treasury Secretary Scott Bessent says, predicting several big announcements in coming days. Bessent told CNN that US President Donald Trump's administration would also send out letters to 100 smaller countries with whom the US does not have much trade, notifying them that they would face higher tariff rates first set on April 2 and then suspended until July 9. "President Trump's going to be sending letters to some of our trading partners saying that if you don't move things along, then on August 1 you will boomerang back to your April 2 tariff level. So I think we're going to see a lot of deals very quickly," Bessent said. Bessent denied that August 1 was a new deadline for negotiations. "We are saying this is when it's happening. If you want to speed things up, have at it. If you want to go back to the old rate, that's your choice," he told CNN. Kevin Hassett, who heads the White House National Economic Council, in an interview on CBS offered some wiggle room for countries engaged in earnest negotiations. "You know, the United States is always willing to talk to everybody about everything that's going on in the world," he said. "There are deadlines and there are things that are close, and so maybe things will push back past the deadline," Hassett said, adding that Trump would decide if that could happen. Stephen Miran, chairman of the White House Council of Economic Advisers, told ABC News that countries needed to make concessions to get lower tariff rates. "I hear good things about the talks with Europe. I hear good things about the talks with India," Miran said. "And so I would expect that a number of countries that are in the process of making those concessions ... might see their date rolled." The US Treasury chief said the administration was focused on 18 important trading partners that account for 95 per cent of the US trade deficit. But he said there had been "a lot of foot-dragging" among countries in getting closure on a trade deal. He declined to name countries that were close to a trade agreement, adding, "because I don't want to let them off the hook". Trump has repeatedly said India is close to signing a deal and expressed hope that an agreement could be reached with the European Union, while casting doubt on a deal with Japan. Thailand is aiming to reduce its $US46 billion ($A70 billion) trade surplus by 70 per cent within five years in a bid to avert steep US tariffs, Finance Minister Pichai Chunhavajira told Bloomberg News on Sunday. The US has threatened to impose a 36 per cent levy on imports from Thailand if a reduction cannot be negotiated before July 9. Thailand is pushing for a best-case rate of 10 per cent, Pichai told Bloomberg, adding that even a range of between 10 per cent and 20 per cent would be acceptable. Pichai expects to submit the revised offer before July 9, the report said. Since taking office, the US president has set off global trade turmoil that has up-ended financial markets and sent policymakers scrambling to guard their economies, including through deals with the US and other countries. Trump on April 2 announced a 10 per cent base tariff rate and additional amounts for most countries, some ranging as high as 50 per cent. The news roiled financial markets, prompting Trump to suspend all but the 10 per cent base rate for 90 days to allow more time for negotiations to secure deals but the process has proven more challenging than expected. That period ends on July 9, although Trump early on Friday said the tariffs could be even higher - ranging up to 70 per cent - with most set to go into effect on August 1. Bessent, asked about the 70 per cent rate, referred back to the April 2 list but that did not include such high rates. The United States is close to clinching several trade deals ahead of a July 9 deadline when higher tariffs kick in, US Treasury Secretary Scott Bessent says, predicting several big announcements in coming days. Bessent told CNN that US President Donald Trump's administration would also send out letters to 100 smaller countries with whom the US does not have much trade, notifying them that they would face higher tariff rates first set on April 2 and then suspended until July 9. "President Trump's going to be sending letters to some of our trading partners saying that if you don't move things along, then on August 1 you will boomerang back to your April 2 tariff level. So I think we're going to see a lot of deals very quickly," Bessent said. Bessent denied that August 1 was a new deadline for negotiations. "We are saying this is when it's happening. If you want to speed things up, have at it. If you want to go back to the old rate, that's your choice," he told CNN. Kevin Hassett, who heads the White House National Economic Council, in an interview on CBS offered some wiggle room for countries engaged in earnest negotiations. "You know, the United States is always willing to talk to everybody about everything that's going on in the world," he said. "There are deadlines and there are things that are close, and so maybe things will push back past the deadline," Hassett said, adding that Trump would decide if that could happen. Stephen Miran, chairman of the White House Council of Economic Advisers, told ABC News that countries needed to make concessions to get lower tariff rates. "I hear good things about the talks with Europe. I hear good things about the talks with India," Miran said. "And so I would expect that a number of countries that are in the process of making those concessions ... might see their date rolled." The US Treasury chief said the administration was focused on 18 important trading partners that account for 95 per cent of the US trade deficit. But he said there had been "a lot of foot-dragging" among countries in getting closure on a trade deal. He declined to name countries that were close to a trade agreement, adding, "because I don't want to let them off the hook". Trump has repeatedly said India is close to signing a deal and expressed hope that an agreement could be reached with the European Union, while casting doubt on a deal with Japan. Thailand is aiming to reduce its $US46 billion ($A70 billion) trade surplus by 70 per cent within five years in a bid to avert steep US tariffs, Finance Minister Pichai Chunhavajira told Bloomberg News on Sunday. The US has threatened to impose a 36 per cent levy on imports from Thailand if a reduction cannot be negotiated before July 9. Thailand is pushing for a best-case rate of 10 per cent, Pichai told Bloomberg, adding that even a range of between 10 per cent and 20 per cent would be acceptable. Pichai expects to submit the revised offer before July 9, the report said. Since taking office, the US president has set off global trade turmoil that has up-ended financial markets and sent policymakers scrambling to guard their economies, including through deals with the US and other countries. Trump on April 2 announced a 10 per cent base tariff rate and additional amounts for most countries, some ranging as high as 50 per cent. The news roiled financial markets, prompting Trump to suspend all but the 10 per cent base rate for 90 days to allow more time for negotiations to secure deals but the process has proven more challenging than expected. That period ends on July 9, although Trump early on Friday said the tariffs could be even higher - ranging up to 70 per cent - with most set to go into effect on August 1. Bessent, asked about the 70 per cent rate, referred back to the April 2 list but that did not include such high rates. The United States is close to clinching several trade deals ahead of a July 9 deadline when higher tariffs kick in, US Treasury Secretary Scott Bessent says, predicting several big announcements in coming days. Bessent told CNN that US President Donald Trump's administration would also send out letters to 100 smaller countries with whom the US does not have much trade, notifying them that they would face higher tariff rates first set on April 2 and then suspended until July 9. "President Trump's going to be sending letters to some of our trading partners saying that if you don't move things along, then on August 1 you will boomerang back to your April 2 tariff level. So I think we're going to see a lot of deals very quickly," Bessent said. Bessent denied that August 1 was a new deadline for negotiations. "We are saying this is when it's happening. If you want to speed things up, have at it. If you want to go back to the old rate, that's your choice," he told CNN. Kevin Hassett, who heads the White House National Economic Council, in an interview on CBS offered some wiggle room for countries engaged in earnest negotiations. "You know, the United States is always willing to talk to everybody about everything that's going on in the world," he said. "There are deadlines and there are things that are close, and so maybe things will push back past the deadline," Hassett said, adding that Trump would decide if that could happen. Stephen Miran, chairman of the White House Council of Economic Advisers, told ABC News that countries needed to make concessions to get lower tariff rates. "I hear good things about the talks with Europe. I hear good things about the talks with India," Miran said. "And so I would expect that a number of countries that are in the process of making those concessions ... might see their date rolled." The US Treasury chief said the administration was focused on 18 important trading partners that account for 95 per cent of the US trade deficit. But he said there had been "a lot of foot-dragging" among countries in getting closure on a trade deal. He declined to name countries that were close to a trade agreement, adding, "because I don't want to let them off the hook". Trump has repeatedly said India is close to signing a deal and expressed hope that an agreement could be reached with the European Union, while casting doubt on a deal with Japan. Thailand is aiming to reduce its $US46 billion ($A70 billion) trade surplus by 70 per cent within five years in a bid to avert steep US tariffs, Finance Minister Pichai Chunhavajira told Bloomberg News on Sunday. The US has threatened to impose a 36 per cent levy on imports from Thailand if a reduction cannot be negotiated before July 9. Thailand is pushing for a best-case rate of 10 per cent, Pichai told Bloomberg, adding that even a range of between 10 per cent and 20 per cent would be acceptable. Pichai expects to submit the revised offer before July 9, the report said. Since taking office, the US president has set off global trade turmoil that has up-ended financial markets and sent policymakers scrambling to guard their economies, including through deals with the US and other countries. Trump on April 2 announced a 10 per cent base tariff rate and additional amounts for most countries, some ranging as high as 50 per cent. The news roiled financial markets, prompting Trump to suspend all but the 10 per cent base rate for 90 days to allow more time for negotiations to secure deals but the process has proven more challenging than expected. That period ends on July 9, although Trump early on Friday said the tariffs could be even higher - ranging up to 70 per cent - with most set to go into effect on August 1. Bessent, asked about the 70 per cent rate, referred back to the April 2 list but that did not include such high rates.
News.com.au
2 hours ago
- News.com.au
BRICS gather in Rio as Trump tariff wars loom
BRICS leaders descended on sunny Rio de Janeiro Sunday, ready to issue a dark warning that US President Donald Trump's "indiscriminate" import tariffs risk hurting the global economy. The 11 emerging nations -- including Brazil, Russia, India, China and South Africa -- represent about half the world's population and 40 percent of global economic output. The bloc is divided about much, but has found common cause when it comes to the mercurial US leader and his stop-start tariff wars. The BRICS are set to voice "serious concerns about the rise of unilateral tariff and non-tariff measures," warning they are illegal and arbitrary, according to a draft summit statement obtained by AFP. In April, Trump threatened allies and rivals alike with a slew of punitive duties, but abruptly offered a reprieve in the face of a fierce market sell-off. Trump and his Treasury Secretary, Scott Bessent, have warned they will again impose unilateral levies on partners unless they reach "deals" by August 1. The BRICS will warn that such moves break world trade rules, "threaten to further reduce global trade" and are "affecting the prospects for global economic development." The draft summit declaration does not mention the United States or its president by name, but it is a clear political volley directed at the occupant of 1600 Pennsylvania Avenue. The Peterson Institute for International Economics, a Washington think tank, estimates Trump's tariffs could trim about two points off US GDP and hit economies from Mexico to the oil-rich Arabian Gulf. - No show - Conceived two decades ago as a forum for fast-growing economies, the BRICS have come to be seen as a Chinese-driven counterbalance to Western power. But as the group has expanded to include Iran, Indonesia and others, it has struggled to reach meaningful consensus on issues ranging from the Gaza war to reforming international institutions. The political punch of this year's summit has been depleted by the absence of China's Xi Jinping, who is skipping the meeting for the first time in his 12 years as president. The Chinese leader will not be the only notable absentee. War crime-indicted Russian President Vladimir Putin is also opting to stay away, but participated via video link. He told counterparts that the influence of BRICS "continues to grow" and said the bloc had become a key player in global governance. Still, Xi's no-show is a blow to BRICS and to host President Luiz Inacio Lula da Silva, who wants Brazil to play a bigger role on the world stage. On Sunday he welcomed leaders to Rio's stunning Guanabara Bay, telling them that multilateralism was under attack, while hitting out at NATO and Israel, among others. He accused the trans-Atlantic defense organization of fueling an international arms race through a pledge by members to spend five percent of GDP on defense. "It is always easier to invest in war than in peace," he said, while accusing Israel of carrying out a "genocide" in Gaza. Iran's President Masoud Pezeshkian, whose nation is still reeling from a 12-day conflict with Israel, is also skipping the meeting, but he was represented by Foreign Minister Abbas Araghchi. A source familiar with summit negotiations said Iran had sought a tougher condemnation of Israel and the United States over their recent bombing of Iranian military, nuclear and other sites. But one diplomatic source said the text would give the "same message" that BRICS delivered last month. Then Tehran's allies expressed "grave concern" about strikes against Iran, but did not explicitly mention Israel or the United States.
