Sam Watkins

What we do observe is that there's actually a lot of capacity within the U.S.

economy to make changes that would address the fiscal position of the U.S.

government.

What we don't observe is the political willpower.

How do you model that in, though?

I think it takes an event.

And I think the relatively positive thing for the US is that they remain a fairly low taxed country.

And there is an answer to be able to address the spending and the tax receipts.

But the political will is not there at this point in time.

But it's not an issue we see on the near horizon.

Yeah.

So beginning with Australia, what I'd emphasise is we see policy in Australia as already being restrictive.

We've seen three successive rate rises that have removed the cuts that we had seen, of course, prior.

And we're now at a point where we're seeing real data emerging in the economy that's suggesting that the rates are having an impact.

I do think that there's other things, of course, that are feeding through into those numbers, like the increased pressure on households from higher prices at the fuel pump.

And of course, as I mentioned, some of the uncertainty and the impact of confidence that we saw as a result of some of the announcements in the budget.

So I think all of those things combined paint a picture of rates in Australia as likely being on hold for a period of time.

We're not yet at the point where we would make a call that rate cuts are around the corner, but hold is our expectation in the near term.

So on hold for the rest of 2026 is our prediction on the RBA at this stage.

Mortgage holders breathe a sigh of relief.