Emeritus professor of public policy and economics at the ANU, and former RBA board member Warwick McKibbin says without any economic shocks, Australia's neutral interest rate should be around four per cent. Mr McKibbin says when he was on the RBA board, he would look at the growth of nominal GDP and US interest rates.
He says there is a lot of uncertainty sparked by US tariffs and trade policies.
While he says the impacts of tariffs themselves would be relatively small for Australia, the issue is what happens to China, and the tariffs on China's exports are very large.
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