RBA boss to speak for first time since tariff shock
Reserve Bank Governor Michele Bullock last spoke publicly just nine days ago, following the central bank’s decision to pause interest rates – but in economic time, it feels like years.
Bullock noted then that the RBA board was concerned that uncertainty over US President Donald Trump’s tariffs could lead to slower economic growth.
Uncertainty persists, but the seismic market reaction to the unprecedented escalation in trade hostilities shows that the situation is worse than had been feared.
Bullock’s first public appearance since the US tariff announcements, at the Chief Executive Women Melbourne annual dinner on Thursday night, will be closely scrutinised for any indication of how the RBA will respond to the carnage.
The ASX200 has fallen almost 15 per cent since its February peak, putting it firmly in correction territory.
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Another $50 billion was wiped from the ASX on Wednesday after Trump’s country-specific tariffs, including imposts of 104 per cent on Chinese goods, came into effect.
There was more uncertainty ahead of the ASX opening on Thursday, after Trump abruptly backflipped on his trade penalties, winding it back to to 10 per cent more nations for 90 days. China, however, has been singled out with its levy hiked to 125 per cent.
The sudden announcement does not affect Australia, which was already subject to a baseline 10 per cent levy.
Trump said the tariff pause came after more than 75 countries contacted the US to discuss the trade measures, hinting he was willing to open the door to negotiations.
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In Australia, household confidence has slumped, with respondents surveyed after the April 2 tariff announcement down 10 per cent on Westpac’s consumer sentiment index compared to a month earlier.
While they don’t believe Australia will enter a recession, economists such as KPMG’s Brendan Rynne and AMP’s Shane Oliver expect a hefty shave to GDP growth.
Traders are now pricing in almost 125 basis points worth of rate cuts by the start of 2026 – and economists think a 50-basis-point cut at the RBA’s next meeting in May is on the cards.
Bullock met Treasurer Jim Chalmers and Treasury Secretary Steven Kennedy, along with the heads of financial regulators ASIC, APRA and the ACCC, on Wednesday to compare notes over the likely fallout to the Australian economy.
The Council of Financial Regulators, as the gathering is known, noted an increase in global financial market volatility, “but that the Australian financial system was strong and resilient”.
Chalmers sought to reassure households that Australia was well-placed to weather the storm.
“We’re working closely with the financial regulators and we’re confident about Australia’s ability to respond to heightened global uncertainty, but we’re not complacent,” he said.
Bullock has also separately met shadow treasurer Angus Taylor.
He and Chalmers faced off in a debate on Wednesday night, each attempting to convince voters they were best suited to guiding Australia through choppy economic waters in the next term of government.
