Is Michele Bullock about to declare victory?
The RBA copped flak for going slow on Trump’s tariffs and rate cuts — but with inflation easing, that caution may soon look like foresight.
The Reserve Bank has withstood months of criticism that it should ease monetary policy, with governor Michele Bullock shrugging off calls for emergency out-of-cycle rate cuts in response to market panic over Donald Trump’s tariffs.
Top economists now believe this cautious handling of rates has been the right approach amid ongoing global volatility.
While the US administration’s geopolitical manoeuvres have created significant uncertainty and market disruption, recent negotiations and a 90-day pause on tariffs with China have once again reshaped the outlook. Next Tuesday’s interest rate decision could mark the moment Bullock declares victory on inflation, with a 25 basis point cut looming in market forecasts.
Westpac chief economist Luci Ellis, a former assistant governor at the RBA, is among those who believe a 25 basis point cut next week is almost certain. However, she sees very little chance of a larger move, even in light of global trade disruption.
