Global uncertainty and consumer sentiment will be key considerations for any Reserve Bank of Australia (RBA) decision to further cut interest rates, after the bank made its second cut for 2025 in May.
That’s the view of ANZ Head of Australian Economics, Adam Boyton, who told the 5 in 5 with ANZ podcast that any future RBA cuts depended on a number of factors.
“For the RBA and for the market, the question from here is ‘How do the higher-frequency data land?’,” Boyton said.
Boyton said the RBA’s adjustments to its domestic outlook – it now expects growth to pick-up more gradually than previously forecast – were unsurprising, given household consumption had softened a little.
There was “a concern from the RBA's perspective that the uncertainty globally will have an impact on the domestic economy,” he added.
“And while I think that's true, the question is 'How much of an impact?’,” Boyton said. “A lot will, of course, depend on how negotiations between the US and its trading partners, in particular China, progress.
“Ultimately, time will tell whether or not the bank needs to deliver additional rate cuts in line with that. Our own view remains that we will see another rate cut in August. I don't think the [RBA] will go in July, although markets have moved toward now expecting a July rate cut.”
Keep up to date with 5 in 5
5 in 5 with ANZ is a daily financial markets podcast featuring the latest news, trends and insights from ANZ economists based around the world.
Hosted by New Zealand-based journalist Bernard Hickey, 5 in 5 with ANZ explores market trends, insights, and data releases in a way that arms listeners with the information they need to start the day.
ANZ’s International network provides a unique opportunity to connect listeners with insights from specialists on-the-ground. It features the voices of ANZ’s team of economists as well as foreign exchange, rates and commodities experts.
Episodes drop weekdays at about 6am Australian eastern standard time, and you can find them on Apple, Spotify, Substack and more.
You can click here to find out more and listen to the latest episode.
