ANZ Weekly: Tariff fallout won’t send the RBA into panic mode

With concerns growing that Trump's trade war won't leave Australia unscathed, investors now expect the RBA to cut rates by 125bp across its easing cycle. The rout in financial markets also appears to have rattled consumers, with new data showing that consumer confidence soured considerably following the Liberation Day announcements. However, it bears mentioning that consumer sentiment has not been a particularly reliable guide to household consumption. The broader picture remains that Australia will be more insulated than most from the US's tariff war. Accordingly, we're sticking to our view that the RBA will only cut rates by another 50bp in the months ahead.