RBA mulls more rate cuts as world prepares for Liberation Day 2.0

The Age

10 hours ago

The Reserve Bank is poised to deliver its fastest cut in interest rates since the early days of the COVID-19 pandemic as it seeks to protect the economy from the fallout of US President Donald Trump's latest tariff war and encourage households to open their wallets.
But the impact of the Trump plan may turn out to be a small positive if United States-based manufacturers leave America in favour of other nations with lower tariffs such as Australia, according to the independent Productivity Commission.
The Reserve Bank's monetary policy board started its two-day meeting on Monday. Financial markets and most economists expect it to back a further quarter percentage point cut in the official cash rate.
Following its May rate cut, interest rates would be at a two-year low of 3.6 per cent. It would be the first time the bank has delivered back-to-back rate cuts since March 2020 when the RBA sought to protect the country from the fallout of the 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.
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Lower inflation, which fell to 2.1 per cent in May, and sluggish economic growth combined with the potential fallout from the Trump tariff agenda have all driven up expectations of a rate cut on Tuesday with a high chance of another rate reduction in August.
An ongoing concern has been the continuing strength of the jobs market. Unemployment has remained about 4.1 per cent for the past year with the country adding almost 330,000 jobs.
The latest ANZ-Indeed measure of job ads, released on Monday, lifted by 1.8 per cent in June to be at its highest level in a year.