It was clear the Reserve Bank was unwilling to make a decision on Tuesday because of uncertainty regarding the leveling of tariffs by the Trump administration.
Although it was clear even at the time that Trump's tariff policy would result in a slowing of the global economy and risk rising unemployment here in Australia, now that the scale of the tariffs is known, the RBA should reconvene and cut rates rather than wait until May 19-20.
The Reserve Bank should get on the front foot and do what markets and economists know is an almost certain rate cut.
Inflation is well within the target. Indeed, should the inflation figures for the first three months of this year be only slightly below average, the official CPI risks falling below 2%.
"The risks of the economy slowing more than anticipated are now heightened due to the Trump tariffs," said Greg Jericho, Chief Economist at The Australia Institute.
"The Reserve Bank was wrong not to cut rates on Tuesday. The Australia Institute has been calling for those cuts to help bolster spending and deliver relief to households who have suffered from price rises that are not of their own doing.
"Waiting until nearly the end of May is far too long. The RBA should be nimble enough to realise that the tariffs levied by the USA are an unprecedented move that is already sending shockwaves through the world's economy.
"It should get out in front and cut rates now rather than wait for Australia's economy to be damaged further."
