Great news for interest rate worriers, with the July rate cut looking like it’s already banked! However, Trump’s actions going forward will be vital for future cuts.

A survey by the Daily Telegraph’s Giuseppe Tauriello found “most economists are predicting the Reserve Bank of Australia (RBA) will cut the official cash rate by 25 basis points to 3.6 per cent when it meets on July 7-8, with most

expecting at least one additional cut before the end of the year and potentially another at the beginning of 2026.”

This was the prevailing view until last week’s weak economic growth number showed real GDP grew by only 0.2% for the March quarter and 1.3% for the year. Actually, we went into a per capita recession, which happens when we divide the people in Australia into what has been made in terms of the value of goods and services produced.

Concerns that the next reading of GDP could be negative means a fourth cut is possible, which would take the cash rate down to 2.85%. Consequently, your mortgage rate should be down 1.5% from the highs we saw in 2024.

This is where the world’s new economics buddy called Donald Trump has a role to play in our material future. “The future of US President Donald Trump’s controversial tariffs policy looms as the single factor that could determine how deep the RBA cuts and, ultimately, how much borrowers can expect to save on their home loans,” Tauriello has concluded after talking to local economists. “AMP chief economist Shane Oliver had been expecting three more rate cuts by February but following the release of weak growth figures last week, suggested a fourth cut could plunge the cash rate down to 2.85 per cent by early next year.”

That means if your lender does the right thing and passes the cuts on, then falls in monthly repayments for the average borrower with a $650,000 mortgage will be around $400 a month, or more than $600 from the recent peak before the RBA made its first cut in February.

A borrower with a $1 million loan would save about $600 a month from current payments, while someone with a $400,000 loan would pocket an extra $250 a month.

These rate cuts would help the economy recover, grow more strongly, create more jobs and help stock prices cope with the impacts of Trump’s policies that could both lower global trade and growth, as well as raise inflation.

Saul Eslake, former chief economist at ANZ and now an independent commentator and consultant, told Tauriello that Trump will be the chief determinant of how many cuts you’ll get.

“It really depends on whether you think Trump will succeed in blowing up the world

economy,” Eslake said. “If he does succeed in blowing up the world economy through the combination of tariffs and ludicrous fiscal policy, and perhaps also by assaults on the independence of the Federal Reserve, then the cash rate could drop to two-point-something.”

However, if the TACO theory applies and the Trump Always Chickens Out insult proves again to be true, then Eslake would expect a better world economy and maybe only two rate cuts ahead for Aussie borrowers.

Remember this: if the worst-case scenario prevails and four rate cuts happen, then we could end up in a recession, lots of Australians would lose jobs and businesses would go broke or see a collapse of profits. And share prices would slump taking our super down with them.

Right now, four out of five economists surveyed think we’ll see a July 8 rate cut by 0.25% from the RBA. Most expect three in total, but if Trump wraps up reasonable trade deals with key players such as China, the European Union and the likes of Japan and South Korea sooner than has been expected, then the global economy could outperform current predictions.

I know many interest rate sufferers would prefer a mad Trump, with the bigger interest rate cut implications. Call me an economist, but I prefer a two- or three-rate cut future, with less unemployment and a stronger economy, higher share prices and bigger superannuation balances.

Since November 2024, when Donald J. Trump became leader of the free world, all our economic fortunes are tied to what this guy dreams up daily!

God bless America and God save our jobs, our businesses and our bank balances!