New Zealand’s central bank cut its benchmark rate by 25 basis points to 3.25% on Wednesday and flagged a slightly deeper easing cycle than it forecast three months ago, underlining the rising economic risks from a sharp shift in U.S. trade policies.

U.S. President Donald Trump’s sweeping tariffs and his broader economic agenda have shaken up financial markets and raised fears of a recession, complicating policymaking for central banks and delaying investment decisions across a whole host of industries.

The 25-bps cut was in line with a Reuters poll where all but one of the 30 economists surveyed forecast the Reserve Bank of New Zealand would reduce the cash rate for the sixth successive meeting.

“Inflation is within the target band, and the Committee is well placed to respond to domestic and international developments to maintain price stability over the medium term,” the RBNZ said in a statement accompanying its policy review.

The central bank has slashed rates by 225 basis points since August, with lower inflation giving policymakers leeway to reduce borrowing costs as the economy faces fresh global risks from Trump’s international trade war.

The central bank is now forecasting the cash rate will be at 2.92% in the fourth quarter of 2025 and at 2.85% in the first quarter of 2026, a slightly deeper easing cycle than had been projected in February.