There are decades where not much happens to the economy and there are weeks where decades happen.
Last week was such a one.
Rate cut expectations eased modestly after the Reserve Bank of Australia held the cash rate steady on Tuesday but then on Thursday, markets were rocked when US President Donald Trump's 'liberation day' tariffs exceeded traders' fears.
Expectations jumped from two cuts by the end of the year before the announcement to four after.
"What a difference a few days can make!" remarked HSBC chief economist Paul Bloxham.
The central bank appeared cautious in its post-meeting commentary, with governor Michele Bullock again noting concern over tightness in the labour market, Mr Bloxham said.
But he now expects the RBA to cut rates to 3.1 per cent by early 2026 - 50 basis points lower than before - because of the negative impact the tariffs will have on global growth.
Additionally, cheap goods diverted to Australia are likely to put downward pressure on imported inflation.
HSBC, ANZ and Barrenjoey all pulled forward their rate cut predictions to the RBA's next meeting in May.
Traders will pay close attention to Ms Bullock as she delivers a speech at the Chief Executive Women annual dinner in Melbourne on Thursday.
Will her reaction to the tariffs be as dovish as the market assumes?
"We'd expect a significant shift in rhetoric and for Bullock to make clear that the board stands ready to ease if the outlook softens," ANZ economists said in a research note.
In its twice-yearly Financial Stability Review on Thursday, the RBA noted uncertainty posed by the tariffs could have a "chilling effect" on household and business spending decisions, impacting economic activity.
Westpac's consumer confidence index and NAB's business survey, both set to be released on Tuesday, will show how households and firms reacted to the federal budget, delivered on March 25.
But any jitters raised by the prospect of an escalating trade war won't show up in full until next month's surveys.
Meanwhile, investors on Wall Street have the jitters with indices nosediving for a second straight day.
The Nasdaq Composite on Friday confirmed a bear market and the Dow Jones Industrial Average entered a correction, as the escalating global trade war spurs the biggest losses since the COVID pandemic.
The S&P 500 lost 322.72 points to end at 5,073.80 points, while the Nasdaq lost 962.82 points to 15,587.79 and the Dow fell 2,237.52 points to 38,314.49.
Australian futures fell 331 points, or 4.28 per cent, to 44.185, while the dollar tumbled to a five-year-low against the greenback and fleetingly dipped under US60¢.
Local shares fell to an eight-month low, with more than $96 billion wiped from the top 500 stocks.
The S&P/ASX200 on Friday sank 188.9 points, or 2.4 per cent, to 7,670.8, while the broader All Ordinaries tanked 202.5 points, or 2.51 per cent, to 7,850.2.
