RBA Holds Interest Rates Steady, Skips April Cut

The Reserve Bank of Australia (RBA) decided to keep the cash rate on hold for now, avoiding any April Fools' surprises. They’re sticking with a rate of 4.10%, which is where it was after they made a long-awaited cut back in February.

The decision comes with some positive signs on inflation, and the fact that housing prices in Australia hit a new record high in March—just a month after that interest rate drop. The RBA’s monetary statement pointed out that they’re keeping a close eye on global events, particularly the ongoing situation with US tariffs and their potential to disrupt global confidence. They also highlighted some geopolitical uncertainties that could weigh on the global economy. If countries start retaliating or if tariffs expand, it could lead to more hesitation from households and businesses about spending.

Despite holding off on a rate cut this time, a lot of economists expect the RBA to drop rates again in 2025. CoreLogic’s Tim Lawless mentioned that inflation data, set to come out on April 30, will play a key role in determining the RBA’s next move. If inflation stays below 3%, which seems likely, a second rate cut might be on the cards.

Big banks like CBA, Westpac, and NAB are predicting up to three rate cuts this year, while ANZ expects just one more in August. But some experts, like Geoffrey Kingston from Macquarie University, think the RBA might be holding back to avoid making waves with the federal election coming up soon. In other words, they’re taking a "wait and see" approach, not rushing into any drastic moves just yet.

It's all a bit of a balancing act at the moment.