Michael Knox, Morgans Chief Economist

Morgans Chief Economist and Director of Strategy, Michael Knox, joins Steve Austin on ABC Radio Brisbane to discuss the IMF’s latest Fiscal Monitor, released in October.

The IMF now expects Australia’s budget deficits to run about 1% of GDP higher out to 2030 than forecast this time last year. That’s numbers Michael says are starting to look like those of European welfare states.

In this interview, Michael covers:

What the IMF’s October Fiscal Monitor shows for Australia’s budget outlook

Why larger deficits add to demand and put upward pressure on inflation

What this could mean for the RBA cash rate and the labour market

The case for lifting the GST and cutting taxes on savings to boost investment and productivity

Who really sets economic policy in Canberra

This video contains general information only and does not take into account your personal circumstances. Please seek advice from your Morgans adviser before making any investment decisions.

In this episode, Michael Knox and Stephen Austin from the ABC unpack the economic challenges Australia faces in 2025. With electricity subsidies ending and energy supply constraints persisting, households are bracing for higher power bills and rising inflation. Here’s what’s on the horizon:

Federal Reserve Interest Rate Outlook: What Investors Need to KnowThe Federal Reserve’s latest projections reveal a surprisingly moderate outlook for inflation and interest rates. Despite tariff concerns earlier this year, the Fed expects inflation to remain subdued and rates to decline gradually. Here’s what this means for markets and investors.

Beginning on the 1st of October 2025, the US government began its current Federal government shutdown.

The shutdown occurred because Democratic Party Senators refused to support a Continuing Resolution to provide funding for the US government. At the time of writing, Republican Senators have now put up Continuing Resolutions for funding to the Senate 11 times, and Democrat Senators have refused to support them 11 times.

Updated Outlook on the Federal Reserve and Australian Cash Rate

In recent days, several people have asked for my updated view on the Federal Reserve and the Fed funds rate, as well as the outlook for the Australian cash rate. So I thought I’d walk through our model for the Fed funds rate and explain our approach to the RBA’s cash rate.

On 7 July the AFR published a list of 37 Economists who had answered a poll on when the RBA would next cut rates. 32 of them thought that the RBA would cut on 8 July. Only 5 of them did not believe the RBA would cut on 8 July. I was one of them. The RBA did not cut.

Michael Knox, Morgans Chief Economist discusses why Trumps moves make sense and how Albanese has been poorly briefed on the matter. Listen in to hear his insights

In this insightful interview, Michael Knox, Chief Economist at Morgans, discusses Australia's growing debt and current account deficit, as outlined in the 2025 federal budget. With projections showing a significant increase in debt over the next few years, Michael explores the implications for future generations and whether the government's economic strategies are sustainable. He also reflects on historical warnings from former Prime Minister Paul Keating about the risk of becoming a "banana republic." Tune in for a deep dive into Australia's financial outlook and the challenges ahead.

Morgans Chief Economist Michael Knox says that for the RBA to get inflation down to 2.5%, unemployment must rise above 4.5% in Australia.

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Morgans Chief Economist Michael Knox says that though the FED are easing quantitative tightening, US consumer demand is still too healthy to allow rate cuts.

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Visit the Morgans website: www.morgans.com.au

Check out our blog: www.morgans.com.au/Blog

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On Instagram: www.instagram.com/Morgans.Australia

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