SYDNEY, Australia–While the Fed holds steady despite pressure from the Trump administration to cut rates, Australia’s central bank has moved to cut interest rates to a two-year low.

The Reserve Bank of Australia said inflation has been cooling, despite global trade risks, and suggested additional easing could come in the months ahead.

25 Basis Point Cut

The RBA has cut its cash rate by 25 basis points to 3.85%.

RBA Governor Michele Bullock said at a post-meeting press conference the board weighed holding rates steady and cutting, and also discussed whether it should cut by 50 BPs, Reuters reported. “Does it mean we’re headed into a long series of interest rate cuts? I don’t know at this point and that’s why I think the cautious 25-basis-point cut with a recognition that if we need to move quickly, we can. We have got space.”

Reuters noted Australia is a major exporter of resources to China and tariffs on the world’s second-biggest economy could hinder growth there and its demand for commodities such as iron ore.