Uncertainty won’t stop rate cuts: Yetsenga

Geopolitical uncertainty will continue to confound markets but is unlikely to lead to a recession due to the resilience of the global economy, according to ANZ Chief Economist Richard Yetsenga.

And the current easing environment in interest rates is here to stay, he told the 2025 ANZ Debt Conference.

“[United States President Donald] Trump definitely brings uncertainty,” Yetsenga said. “But the world’s not particularly vulnerable, I don’t think, economically.”

Global interest-rate activity amid a mid-cycle economic slowdown has not always been consistent, he said - but the direction is clear.

“There’s still, clearly, in our view, an easing theme going on globally,” Yetsenga said.

Household balance sheets remain strong all around the world, Yetsenga said, including in some cases at record levels. Strength is clear across homes in Australia, the US and Japan, among others. China is the one exception.

“I think rate cuts are going to gain traction because delinquencies are low,” Yetsenga said.

Infrastructure and manufacturing activity in critical economies is also high, he said.

The US Federal Reserve should also be ultimately unaffected by the uncertainty when it comes to future rate decisions, Yetsenga said – although will perhaps now operate on a longer timeline.

The event also heard from Mahjabeen Zaman, Head of FX Research at ANZ. More than 300 people attended the ANZ Debt Conference. Now in its 15th year, the conference is the largest of its kind in Australia.