Phil is joined by Dr Isaac Gross, Department of Economics, Monash Business School, about the Reserve Bank of Australia’s announcement of a cash rate cut, and its implication.

Dr Gross says, “The RBA’s cut to interest rates by 25 basis points this afternoon reflects the softer outlook for inflation, as the cost-of-living crisis has begun to ease. 
 
“We currently expect two further cuts over the remainder of the year. However, this outlook is highly contingent on two major factors: the continued moderation of inflation and the potential impact of Donald Trump’s trade policy. 
 
“Should Trump re-commit to radically higher tariffs, we would almost certainly see a large reduction in interest rates. On the other hand, the chance for further cuts could evaporate if inflation stays stubbornly high, which remains a real risk given the strength of recent job numbers and wage growth data.”

See omnystudio.com/listener for privacy information.