Outlook

Outlook
Lurking catalysts could disrupt calm in global markets
While the third quarter of 2025 delivered strong performance across global asset markets, with the United States leading the way in economic growth, there’s mounting uncertainty over the durability of this expansion and what it means for investors. At face value macroeconomic data continues to paint a solid picture, with jobless claims remaining low, core capital goods orders having increased, and second quarter GDP revised upward to an annualised rate of 3.8% - due largely to spending by U.S. consumers. However, despite this momentum, U.S. labour markets remain soft which has created a disconnect between output and employment. There’s also growing fear that while consumer spending has been propped up by wealth gains and lower saving rates, it will start falling away due to rising inflation and weakening labour income. Adding to these concerns, the U.S. central bank’s monthly Survey of Consumer Expectations found that fewer U.S. consumers expect their households’ financial situations to be better off a year from now.Outlook for sharesWhile shares remain strong, Shane Oliver chief economist with AMP believes the risk of a correction remains high given stretched valuations and numerous potential triggers around: Slowing
Outlook
Historic Fed meeting as Miran appointed, Cook survives
The Federal Reserve delivered a widely expected interest rate cut on Wednesday, 17 September, 2025, lowering its benchmark rate by 25 basis points to a range of 4.00% to 4.25%. While the move was anticipated by markets, the surrounding circumstances made this meeting one of the most historic and politically charged in decades. Newly confirmed Governor Stephen Miran, appointed by President Donald Trump just one day earlier, was the lone dissenter, pressing for a more aggressive half-point cut. Meanwhile, Governor Lisa Cook participated in the deliberations despite ongoing legal battles over Trump’s attempt to remove her. The meeting showcased not only diverging economic views inside the Fed but also underscored the growing political pressure on America’s central bank.A Cut Expected, but Clouds Over the Path AheadMarkets had largely priced in the Fed’s decision, with futures assigning more than a 90% probability to a quarter-point reduction. Yet the bigger question was what happens next. The Fed’s updated “dot plot” projections suggested two more cuts before the end of the year, bringing the policy rate closer to what officials view as a neutral level of 3%. However, the path beyond remains murky. Some policymakers
Outlook
Australia’s safe haven status attracts global capital
Australia’s growing appeal to investors as a stable democracy with sound economic fundamentals is being reflected in enhanced capital flows from around the world, which has helped drive the Aussie dollar higher against the greenback, up 11% since an early April low. Given that global investors don’t just cut and run out of a country, capital allocation decisions typically are not made quickly. However, there’s been a noticeable pick-up in offshore demand for Australian assets, especially fixed income, in the last couple of months. While initial waves of capital redeployment start with a bond maturity or a sale of equities in another country, they typically spread to less liquid real assets such as infrastructure and property. According to National Australia Bank’s chief economist Sally Auld, global asset allocators are comparing Australia’s outlook for trend growth, low inflation, full employment and central bank independence favourably against the less appealing credentials of other advanced economies. As a case in point, inflation is above target and growth is slowing in the U.S.; the same thing is happening in the UK, while the German economy hasn’t grown in five-and-a-half years. “If I was sitting offshore wi
Outlook
Powell warns on inflation, jobs; Fed split on rate cuts
Federal Reserve Chair Jerome Powell said on Tuesday the central bank must continue weighing the twin challenges of high inflation and a cooling labour market as policymakers debate how quickly to cut interest rates. “Near-term risks to inflation are tilted to the upside and risks to employment to the downside – a challenging situation,” Powell said, sticking closely to the language used last week when the Fed reduced its benchmark rate by a quarter point. The federal funds rate, now at 4% to 4.25%, remains restrictive enough to keep pressure on inflation, but leaves the Fed well positioned to respond to potential economic developments. "Our policy is not on a preset course,” Powell said. While that phrase is a familiar refrain among central bankers, it has taken on added weight as divisions within the Fed widen. Earlier on Tuesday, Fed Vice Chair for Supervision Michelle Bowman argued for quicker and more decisive easing to protect a labour market she fears could deteriorate further. “It’s a lot easier to support the labor market by lowering the federal funds rate than it is to fix it after it’s broken,” she said. With the unemployment rate at 4.3%, Bowman said slowing hiring was enough to justify action. “It is
Outlook
RBA sees more room to lower interest rates
The Reserve Bank of Australia (RBA) is in a good position to lower interest rates further if changes in economic conditions badly affect Australia, RBA Governor Michelle Bullock said. Answering questions from a parliamentary committee, she the RBA had “room to move” if the world trading system badly impacted China and, therefore, Australia. “We've got pretty a strong labour market still, inflation is back in the (target) band, the interest rates is still at 3.6% and therefore we've got room to move if we need,” she told the House of Representatives Standing Committee on Economics. In her opening statement, Bullock said the RBA’s Board’s strategy had been to sustainably lower inflation to its 2% to 3% target range within a reasonable timeframe while allowing the jobs market to adjust gradually towards full employment She said inflation had fallen substantially since the peak of 7.8% in 2022 to within the target range due to higher interest rates, with underlying inflation falling to 2.7% in the year to June and headline inflation to 2.1%. The official cash rate has been cut by 75 basis points to 3.6% this year after being held steady since November 2023. Labour market conditions were close to full employment with

Outlook

Lurking catalysts could disrupt calm in global markets

Historic Fed meeting as Miran appointed, Cook survives

Australia’s safe haven status attracts global capital

Powell warns on inflation, jobs; Fed split on rate cuts

RBA sees more room to lower interest rates