RBA set to cut rates to counter trade risks amid slowing inflation

The Reserve Bank of Australia (RBA) has shifted its focus from combating inflation to addressing new economic risks. These problems have arisen due to US President Donald Trump's trade policy and geopolitical turmoil. RBA governor Michelle Bullock is already adjusting monetary policy in preparation for a possible interest rate reduction in light of current economic conditions, Bloomberg reports.

Australia's inflation rate has remained within the RBA's target range of 2–3% for nine consecutive months. In this regard, the regulator is cutting its consumer price index forecasts. According to Bloomberg analysts, Australia's economic growth remains low. The next release of the country's GDP data is scheduled for the upcoming week.

Given these indicators and the unstable situation in global markets, the RBA is preparing to take measures to manage risks and mitigate the consequences of a potential economic slowdown. Goldman Sachs analysts predict the RBA will cut rates to 3.1% in July, August, and November.