Despite the uncertainty and volatility, equity markets have been optimistic about the prospect of interest rate cuts in Australia, pricing in two rate decreases this year, firstly in August. This has sent our sharemarket, especially index heavyweights such as the big four banks, to new highs.

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CBA chief executive Matt Comyn said the bank’s share price, which last week hit a record high, was partly a result of a sense across the market that rates had peaked. “That may or may not be the right call,” he said. “The other aspect is the credit market [and] how strong the demand is at the moment in terms of equity and debt.”

Meanwhile, Macquarie chief executive Shemara Wikramanayake took a more optimistic stance on rates, saying the economy looked set for a soft landing. Australia’s low government debt levels and budget surplus would give the country room to address cost-of-living issues through tax and industrial relations reform, she said.

“Inflation seems to be coming under control and central banks seem to be getting to a point where they can now reduce rates by later this year and deliver that soft landing that really none of us were forecasting,” she said. “The whole world economy looks in quite a good position.”