Treasurer Jim Chalmers has given mortgage holders hope today, revealing market volatility sparked by Donald Trump’s tariff war could trigger interest rate cuts this year.

Chalmers yesterday highlighted forecasts by bond markets the Reserve Bank of Australia would slash the cash rate up to four times this year, and even a 50 basis point cut next month.

But fund manager and investment expert Jun Bei Liu played down such a radical move by the RBA.

“That’s very unlikely. We will get a rate cut. It looks like it’s about 25 basis points.” she told Today this morning.

“It’s just not how the RBA works. I know globally share market is moving in a very volatile, volatile manner, but 50 basis points is just not how they work.”

Despite the turmoil on currency and share markets, Chalmers insisted Australia could weather the economic turbulence.

“What we’re seeing here is the impact of a series of bad decisions taken about tariffs and the whole world is trying to get their head around the impacts on their own economies and the global economy, as well,” he said.

But Chalmers also cautioned the federal government expects Australian GDP to take a hit and prices of some goods will rise.

Treasury data released yesterday showed the US tariffs will deliver a “modest” 0.2 per cent hit to GDP by the end of next year, and just 0.1 per cent by 2030.

Inflation, meanwhile, is expected to be 0.2 percentage points higher this year this year due to the new taxes imposed on imports into the US.

Liu says Australian shares are expected to rebound today after they suffered the worst one-day loss since 2020 yesterday.

“But now we don’t have a pandemic. We’ve got Donald Trump … It can change very quickly,” she said.