National Australia Bank now expects the Reserve Bank to begin cutting rates from May, forecasting a 50 basis point reduction, followed by a series of 25-point cuts through to February 2025—bringing the cash rate to 2.6%. The shift follows global uncertainty after US President Donald Trump paused plans for sweeping tariffs, excluding China, which had rattled financial markets.

NAB economists said, “A restrictive policy stance in Australia is no longer appropriate, in our view,” citing global risks and domestic weakness.

Deutsche Bank and AMP also updated forecasts, with AMP’s Shane Oliver stating, “I think we will see a cut in May and there’s a good chance we will see several more cuts this year.”
Despite recent global developments, Westpac and CBA have held their cash rate expectations steady.

Though Australia’s direct exposure to tariffs is limited, concerns remain over reduced global demand, especially from China, which could hinder Australia’s economic recovery.