Australian stocks expected to fall following Wall Street decline

The Australian share market is expected to decline following a drop on Wall Street. Investors are feeling cautious ahead of an important interest rate decision by the US Federal Reserve. Live updates on this situation are available in our blog. Treasurer Jim Chalmers has lowered expectations for unexpected spending in the upcoming federal budget. In a recent speech, he noted the changing global situation since the US presidential inauguration. As a trading nation, Australia faces significant challenges. According to the Organisation for Economic Co-operation and Development (OECD), economic growth in Australia may slow next year due to market uncertainties related to Donald Trump's trade policies. Tariffs on steel and aluminium imports from Australia and parts of Europe are contributing factors. ABC chief business correspondent Ian Verrender explained that tariffs will have a minimal direct effect on Australia, impacting the economy by about 0.02 percent. However, the indirect effects could be about four times greater, resulting in an estimated 0.1 percent hit. Verrender also expressed concern about the potential for rising inflation. He does not anticipate any significant surprises or cuts in the upcoming federal budget. Despite these challenges, RBA chief economist Sarah Hunter noted that household disposable income grew in the last quarter of the previous year, leading to increased spending.