Expectations around the RBA’s next move are evolving rapidly, as global trade tensions reshape the economic outlook.
Following a temporary pause on US tariff hikes (excluding China), National Australia Bank now forecasts a faster rate cut cycle, predicting a drop to 2.6% by February, beginning with a potential 50 basis point cut in May. NAB economists note that “a restrictive policy stance in Australia is no longer appropriate,” as downside risks to growth intensify.
ANZ, Deutsche Bank, and AMP have similarly revised their projections, with some anticipating up to four cuts this year. The common thread: global uncertainty is now the dominant driver of monetary policy.
“The main risks to the Australian economy are not coming domestically. They’re coming globally.” — Adelaide Timbrell, ANZ
While CBA and Westpac have held firm on their forecasts, market sentiment suggests the path ahead may be more aggressive than initially expected.
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