From Yahoo Finance: 2025-04-02 20:33:00

Australia’s central bank warns of global economic headwinds due to U.S. trade policies, which could increase risk aversion in markets and raise financing costs. Share prices drop after Trump announces new tariffs, prompting threats of retaliation. RBA warns of chilling effect on spending from trade policy uncertainties. Tariffs on China could be as high as 54%.

RBA report notes potential disorderly price adjustments and increased borrowing costs for corporations, particularly in the non-bank lending sector. Trump’s tariffs could exacerbate vulnerabilities in China’s financial system, potentially requiring Beijing to support economic growth, increasing debt. Australian banks are well-capitalized, businesses resilient, households facing easing financial pressures. RBA holds interest rates steady at 4.1%, waiting for more data on inflation.

Swaps imply 70% chance of easing in May, total expected easing this year jumps to 80 basis points due to U.S. tariffs news. RBA estimates 3% of borrowers at risk of falling behind on loan repayments. Vulnerabilities could increase if easing financial conditions lead to excessive household debt. Home prices hit record highs in March post-rate cut.



Read more at Yahoo Finance: Australia central bank warns US tariff policies could threaten global growth