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The Reserve Bank of Australia (RBA)’s previous cautious stance—delaying a rate cut in July—was likely influenced by concerns over potential inflationary pressures and external shocks. With the possibility of further inflation in international markets, partly driven by tariffs and trade tensions, the RBA faces a delicate balancing act.
Reflections on Global Trade
Despite the optimism often surrounding free trade agreements, recent developments underscore that even a "10% hit"—a figure many consider manageable—can have significant economic repercussions. This realization serves as a reminder of how interconnected the global economy truly is.