Big rate cut still on the cards after inflation data
- UBS CEO Sergio Ermotti warned that a decline in interest rates could be stalled by tariffs from Donald Trump's second administration, which may impact inflation.
- Markets are concerned about Trump's potential tariffs of 25% on Mexico and Canada, and retaliatory measures against China regarding TikTok.
- Inflation is cooling in major economies, with annual non-tradable inflation slowing to 4.5%, which is lower than the Reserve Bank of New Zealand's expectation.
- Analysts expect annual CPI inflation to end 2025 at around 2.5%, with further cuts to the official cash rate likely due to cooling inflation trends.
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