The Reserve Bank of Australia just released its Statement on Monetary Policy for May of 2026. The headline forecast: inflation back down to 2.4% by mid-2027. Back under control. Nothing to worry about.

The whole thing seems like a bit of a Christmas wish list to me. One that requires Donald Trump to have a string of multiple rational thoughts in a row, a war to end on schedule and global markets to behave. Here are the reasons I don't buy it.

1. We Have No Idea What Donald Trump Is Thinking

Let me say that plainly. We have no idea what Donald Trump is thinking at any given moment.

I'm not being flippant. I mean it as a genuine risk assessment. The RBA's entire baseline forecast is conditioned on geopolitical stability. On the assumption that energy markets calm down, that trade flows normalise, and that the global environment cooperates with their modelling. But sitting in the middle of all of that is a man who has shown, repeatedly, that he will torch a trade deal, slap on a tariff, or rewrite foreign policy between one press conference and the next.

A bet on inflation and geopolitical risk easing under Donald Trump is foolish at best, given he’s both printed more money than any other president in history and has been a bull in the china shop with global geopolitics.

This is not a risk management strategy for serious adults. It is a bunch of fairytales dressed up as economic analysis delivered fresh from your central bank, where believing them will cost you your life savings

2. We've Been Here Before

Cast your mind back to 2021. The narrative from central banks around the world, including here in Australia, was that the spike in inflation was transitory. Temporary. Under control. The experts had it figured out.

We lived through what happened next. Inflation ran hot for years. The cost of groceries, fuel, rent and building materials hammered household budgets while the official line kept telling us relief was just around the corner. By the time the RBA started hiking rates aggressively, the damage was already done.

Now the same institution is telling us that inflation will be back inside the target band within 18 months. The models are more sophisticated this time, sure. But the underlying confidence is identical. And the track record is what it is.

3. The Entire Forecast Is a Geopolitical Bet

The RBA's baseline rests on a single critical assumption: that the Middle East conflict resolves promptly, the Strait of Hormuz reopens, and oil prices drift gradually back down through 2026 and into 2027.

Read that again.

Their inflation outlook, the one being presented to the Australian public as the central case, requires a war to end on a schedule that suits their spreadsheet. If the conflict drags on, if energy infrastructure sustains further damage, or if Trump destabilises the region through foreign policy decisions that nobody saw coming, the forecast doesn't just get revised. It collapses.

This is not a peripheral risk. The RBA acknowledges it themselves through their adverse scenarios. They just don't lead with it.

4. The RBA Cannot Control the World's Reserve Currency

Here's something the Statement barely touches. What happens if the US Federal Reserve cuts interest rates while the RBA is hiking?

The RBA is assuming 60 basis points of tightening here in Australia by the end of 2026. That may well happen. But if the Fed is simultaneously loosening in the United States, the interest rate differential creates capital flow dynamics that can completely undermine what the RBA is trying to achieve.

When the USD weakens, global commodity prices rise. Oil, gold, iron ore, agricultural inputs. All of them are priced in US dollars. Australia is a price taker in that system. We don't set the price. We pay it. The RBA's forecast assumes a flat exchange rate throughout the forecast period. That single assumption carries enormous consequences, and it gets very little scrutiny in the document.

The RBA can control the cash rate. It cannot control the world's reserve currency.

5. Your Real Wages Are Already Going Backwards

This one comes straight from the RBA's own forecast table. Their projected Real Wage Price Index for the June quarter 2026 is negative 1.5%.

That means that even as nominal wages rise, inflation is outpacing them. Australians are getting paid more and affording less. Workers know it. They can feel it every week. And so they are doing what workers always do in this environment: pushing for higher wages to compensate.

The RBA acknowledges that short-term inflation expectations have already risen and that workers are incorporating those expectations into wage negotiations. But then, in the same document, they assume long-term inflation expectations remain anchored to the target. You cannot have it both ways. Once a wage-price dynamic embeds itself, history shows it is very hard to break without causing a recession. Which, incidentally, they are also not forecasting.

6. Equity Markets and Construction Are Risks They're Not Pricing In

The RBA's document focuses heavily on energy prices and labour markets. What it doesn't meaningfully address is the state of global equity markets.

We are sitting in a period of significantly inflated asset prices. Equities, particularly in the US technology sector, have been trading at valuations that require an enormous amount of future optimism to justify. That optimism is fragile. We saw just how fragile last weekend, when a single US jobs report sent markets into a sharp sell-off overnight. Not a geopolitical crisis. Not a banking collapse. A jobs report. I wrote about exactly what happened and what it means for precious metals in a separate article on this site.

Then there's construction. The RBA treats cost pressures in building materials as a temporary energy-driven phenomenon that will unwind as oil prices fall. I don't see it that way. Construction inflation in Australia has its own structural legs. This is partly a Cantillon effect story. Inflationary pressure doesn't hit all asset classes at once. It moves through the economy in phases, and property and construction are sitting in a phase of their own, driven by chronic undersupply, labour shortages, planning delays and an already entrenched cost base. That doesn't reverse when Brent crude comes down ten dollars a barrel.

So What Do You Do About It?

If the official forecast requires everything to go right, and history suggests it rarely does, the question becomes: where do you put your money?

This is what I keep coming back to. Gold, silver and platinum hold purchasing power across time, regardless of what central banks decide, what politicians do, or what markets price in on any given Monday morning.

In a high inflation environment, precious metals rise because they are the alternative to fiat currency losing value. That's not a theory. The 1970s proved it in real time. As inflation raged and interest rates climbed through that decade, gold went from around 50 USD per ounce to over 800 USD. Stocks went essentially nowhere for ten years. The people who held physical metal came out the other side with their wealth intact.

Gold, silver and platinum also carry zero counterparty risk. There is no institution behind them that can fail, no government that can freeze them, no bank that can confiscate them. You own them outright. In a world where I'm being asked to trust a central bank forecast that depends on Trump behaving predictably and a Middle East conflict ending on schedule, that matters to me enormously.

I'm not telling you what to do with your money. That's not my place. What I can tell you is what I'm doing with mine. I'm stacking physical gold, silver and platinum. I'm doing it steadily. And I'm doing it because I believe the RBA's forecast requires a level of faith in institutions and geopolitical outcomes that the evidence simply does not support.

The forecast requires everything to go right. My strategy doesn't.

What a time to be alive.

Sam from Liberty Bullion.