Money

Australia cuts policy rate to 2-year low

Australia lowers policy rate to 3.85%, a two-year low, as inflation worries ease amid global trade uncertainties.

Published

4 weeks ago

May 21, 2025

Ahron Young

Australia lowers policy rate to 3.85%, a two-year low, as inflation worries ease amid global trade uncertainties.

In Short:
Australia’s central bank has cut its policy rate to 3.85% due to easing inflation concerns, while anticipating challenges from global trade uncertainties. Although the economy shows some growth, analysts warn of risks that could hinder recovery and suggest further rate cuts may be needed.

Australia’s central bank has reduced its policy rate by 25 basis points to 3.85%, the lowest in two years, as inflation concerns ease.

The Reserve Bank of Australia stated that risks to inflation have lessened significantly. However, global trade policy uncertainty may still impact the economy.

The RBA anticipates headline inflation will rise in the latter half of 2025 as government subsidies are removed, before stabilising at the middle of the inflation target range.

Australia’s inflation rate recently fell to 2.4%, the lowest level in four years. The RBA’s inflation target is between 2% and 3%.

Slow recovery

Despite this, the central bank warned of a potential slow recovery in household consumption, which may lead to subdued demand and a worsening job market.

Analysts suggest further rate cuts from the RBA may be necessary. Abhijit Surya from Capital Economics believes the central bank has overestimated the negative impact of trade tensions.

The Australian economy showed signs of recovery, with a 1.3% year-on-year GDP growth in the fourth quarter, its first growth since September 2023.

However, analysts still highlight significant risks to the economy due to global trade tensions and domestic uncertainties.

HSBC analysts noted recent tumultuous global economic conditions have had a modest negative impact on Australia, predicting a slightly disinflationary effect.

Money

Markets ignore Israeli-Iranian conflict but risks remain high

Markets remain optimistic despite the escalating Israel-Iran conflict, raising concerns of potential complacency among investors.

Published

5 hours ago

June 17, 2025

Ahron Young

Markets remain optimistic despite the escalating Israel-Iran conflict, raising concerns of potential complacency among investors.

In Short:
Market analysts warn that global investors are underestimating the conflict between Israel and Iran, despite resilient stock market gains. Analysts highlight the potential for prolonged conflict and significant impacts on energy markets, cautioning against complacency.

Global investors are currently underestimating the potential impact of the ongoing conflict between Israel and Iran, according to market analysts.

Despite four days of escalating fighting, which has resulted in significant casualties, global stock markets have shown resilience. Stocks in Europe, Asia-Pacific, and the U.S. have all seen gains, indicating a disconnect between market performance and geopolitical developments.

Investment director Russ Mould highlighted the risk of a broader conflict affecting energy markets. He noted that the situation is complex and the ramifications could extend beyond financial concerns.

Heightened risks

Strategist David Roche suggested the conflict may last longer than typical Israeli responses, posing heightened risks. Torbjorn Soltvedt from Verisk Maplecroft expressed that the current situation resembles an open-ended war, with severe implications for the region and global energy markets.

Energy prices have already reacted to the unrest, with crude oil experiencing significant price fluctuations. Analysts caution that a period of calm might lead markets to mistakenly believe in lasting peace, potentially creating buying opportunities in energy assets.

Conversely, some analysts, like Deutsche Bank’s Jim Reid, maintain a more cautious outlook, noting that retaliatory actions between Iran and Israel have yet to escalate dramatically. He indicated that historical patterns suggest a typical market recovery from such shocks.

Money

Australia’s stalled economy forces businesses to innovate or die

Australia’s economy is slowing with 0.2% GDP growth; experts suggest interest rate cuts, prompting businesses to adapt for growth.

Published

6 days ago

June 11, 2025

Ahron Young

Australia’s economy is slowing with 0.2% GDP growth; experts suggest interest rate cuts, prompting businesses to adapt for growth.

Australia’s economy is slowing fast, with GDP growth at just 0.2% and output per person in decline. Experts are now predicting steep interest rate cuts to avoid recession.

What can businesses do to adapt and grow in this climate? Subscribe to never miss an episode of Ticker – https://www.youtube.com/@weareticker

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Money

World Bank predicts U.S. growth cut by tariffs

World Bank forecasts U.S. growth halving due to tariffs; global economy also faces significant slowdown, especially in exports.

Published

6 days ago

June 11, 2025

Ahron Young

World Bank forecasts U.S. growth halving due to tariffs; global economy also faces significant slowdown, especially in exports.

In Short:
The World Bank has downgraded U.S. growth projections to 1.4% for 2025 due to President Trump’s tariff policies, warning that increased tariffs could worsen the global economic slowdown. The report highlights a decline in growth for multiple economies, with a particular emphasis on the negative impact on living standards and the need for negotiated trade barriers.

The World Bank has downgraded its growth projections for the U.S. economy, forecasting an increase of just 1.4% in 2025, down from the previous year’s 2.8%. This reduction is attributed to President Trump’s tariff policies, which are anticipated to hamper both U.S. and global growth.

The World Bank’s latest report highlights an expected slowdown in multiple economies, including the eurozone, Japan, and India. Mexico is projected to experience the most significant impact, with growth dropping to 0.2% from 1.5%.

Exacerbate the slowdown

Amid these forecasts, the World Bank warned that a further rise in tariffs could exacerbate the slowdown. If tariffs were raised by an additional 10 percentage points, global growth could plummet to 1.8% this year and 2% in 2026. Such an escalation would lead to reduced trade, declining confidence, and increased market turmoil.

Indermit Gill, the World Bank’s chief economist, noted that if a course correction is not made, the negative effects on living standards could be severe. The Organisation for Economic Cooperation and Development has also voiced concerns about the implications of tariffs, predicting a U.S. growth rate of 1.6% with inflation approaching 4%.