(Sharecast News) - Australia's central bank on Tuesday cut its benchmark interest rate to a two-year low, citing the uncertainty caused by US tariffs and cooling domestic inflation.
The Reserve Bank of Australia cut the main cash rate by 25 basis points to 3.85% and remained cautious on further easing after a two-day policy meeting.

"Inflation is in the target band and upside risks appear to have diminished as international developments are expected to weigh on the economy," the board said in a statement on Tuesday.

RBA Governor Michele Bullock said that since the bank's last board meeting, "global economic and policy uncertainty has increased substantially following tariff announcements by the US administration".

"The response of its trading partners and subsequent changes to the policies, including various bilateral agreements and deals... it's been a complete roller coaster. If the trade outcomes are much worse for the global economy, though, we could be facing a much larger downturn in Australia, with implications for inflation and unemployment."

Reporting by Frank Prenesti for Sharecast.com

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