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You can find the current article at its original source at https://www.theguardian.com/australia-news/2025/apr/10/bullock-plays-down-hopes-of-outsized-may-rate-cut-as-rba-warily-eyes-trump-trade-war
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| Version 1 | Version 2 |
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| Bullock plays down hopes of outsized May rate cut as RBA warily eyes Trump trade war | Bullock plays down hopes of outsized May rate cut as RBA warily eyes Trump trade war |
| (30 days later) | |
| Governor’s speech flags rocky path ahead and gives no indication of increasing the pace of rate cuts in 2025 | Governor’s speech flags rocky path ahead and gives no indication of increasing the pace of rate cuts in 2025 |
| The Reserve Bank of Australia governor says it is “too early” to judge how Donald Trump’s trade war will affect interest rates over coming months, while hosing down forecasts the bank will issue a double rate cut in May. | The Reserve Bank of Australia governor says it is “too early” to judge how Donald Trump’s trade war will affect interest rates over coming months, while hosing down forecasts the bank will issue a double rate cut in May. |
| Michele Bullock’s measured tone on Thursday evening in Melbourne gave no indication of a central bank that sees the need, at least at this stage, to accelerate the pace of rate cuts in 2025, as many economists now expect. | Michele Bullock’s measured tone on Thursday evening in Melbourne gave no indication of a central bank that sees the need, at least at this stage, to accelerate the pace of rate cuts in 2025, as many economists now expect. |
| “We are mindful of not adding to the uncertainty, and to that end, it’s too early for us to determine what the path will be for interest rates,” she said. | “We are mindful of not adding to the uncertainty, and to that end, it’s too early for us to determine what the path will be for interest rates,” she said. |
| Addressing the Chief Executive Women’s annual dinner, the RBA governor briefly mentioned “developments over the past week”. | Addressing the Chief Executive Women’s annual dinner, the RBA governor briefly mentioned “developments over the past week”. |
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| “Inevitably, there will be a period of uncertainty and adjustment as countries respond to the ongoing tariff announcements by the United States administration,” she said. | “Inevitably, there will be a period of uncertainty and adjustment as countries respond to the ongoing tariff announcements by the United States administration,” she said. |
| “It will take some time to see how all of this plays out and the added unpredictability means we need to be patient as we work through how all of this could affect demand and supply globally.” | “It will take some time to see how all of this plays out and the added unpredictability means we need to be patient as we work through how all of this could affect demand and supply globally.” |
| Bullock’s speech came after stocks on Wall Street staged a historic rally on Wednesday night, triggered by Trump’s abrupt announcement that there would be a 90-day pause on the substantially higher “reciprocal” tariffs on scores of countries – with the major exception of China. | Bullock’s speech came after stocks on Wall Street staged a historic rally on Wednesday night, triggered by Trump’s abrupt announcement that there would be a 90-day pause on the substantially higher “reciprocal” tariffs on scores of countries – with the major exception of China. |
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| Australia’s benchmark S&P/ASX 200 share market index jumped 4.5%, while European stocks soared in early trade on Thursday evening. The Australian dollar jumped nearly US2c to US61.5c. | Australia’s benchmark S&P/ASX 200 share market index jumped 4.5%, while European stocks soared in early trade on Thursday evening. The Australian dollar jumped nearly US2c to US61.5c. |
| The rapid about-face in Washington also forced Deutsche Bank to reverse its prediction of a double RBA rate cut on 20 May, just 48 hours after making the call. | The rapid about-face in Washington also forced Deutsche Bank to reverse its prediction of a double RBA rate cut on 20 May, just 48 hours after making the call. |
| Bullock, however, indicated that an uncertain and rocky path lay ahead, saying “financial market and economic volatility can be expected as this process unfolds”. | Bullock, however, indicated that an uncertain and rocky path lay ahead, saying “financial market and economic volatility can be expected as this process unfolds”. |
| “A key focus for us is how all this uncertainty is affecting decisions made by households and businesses in Australia.” | “A key focus for us is how all this uncertainty is affecting decisions made by households and businesses in Australia.” |
| Bullock, who in her speech traced her early journey through the male-dominated ranks of the central bank to eventually claim the top job, said Trump’s trade war was not having the disruptive effect on financial markets as previous crises, such as the GFC. | Bullock, who in her speech traced her early journey through the male-dominated ranks of the central bank to eventually claim the top job, said Trump’s trade war was not having the disruptive effect on financial markets as previous crises, such as the GFC. |
| “And second, the Australian financial system is strong and well placed to absorb shocks from abroad,” she said. | “And second, the Australian financial system is strong and well placed to absorb shocks from abroad,” she said. |
| “We are carefully considering several factors including the response of our trading partners, additional counter-responses from the US, the response of our exchange rate, and adjustments in other financial markets. | “We are carefully considering several factors including the response of our trading partners, additional counter-responses from the US, the response of our exchange rate, and adjustments in other financial markets. |
| “All of this – together with our usual detailed analytical work and scenarios – is helping us build a fuller picture of the possible impacts as we prepare for the next monetary policy board meeting on 19-20 May. There are a lot of moving parts.” | “All of this – together with our usual detailed analytical work and scenarios – is helping us build a fuller picture of the possible impacts as we prepare for the next monetary policy board meeting on 19-20 May. There are a lot of moving parts.” |