RBA Holds Cash Rate Despite Signs of Relief

On 2 April, the Reserve Bank of Australia (RBA) kept the cash rate steady at 4.35% for the third consecutive meeting. Although inflation is easing, RBA Governor Michele Bullock made it clear that the battle against high prices isn’t over yet. The Bank remains cautious, watching to ensure inflation continues its downward trend before considering any rate cuts.

Economy Proves Resilient but Risks Remain

While household spending has slowed, the overall economy is holding up better than expected. Employment figures remain strong, and wage growth, although moderating, is still supportive. However, the RBA noted that risks are finely balanced: slower growth could help tame inflation further, but persistent cost pressures, especially in services, could keep rates higher for longer.

Property Market Rebounds Amid Rate Pause

The decision to hold rates comes as property prices across Australia continue to climb. Buyer confidence is growing, spurred by expectations that interest rates may have peaked. However, affordability remains a challenge, particularly for first-home buyers navigating higher mortgage repayments alongside rising house prices.

Eyes on Federal Budget and Global Factors

Attention now turns to the upcoming Federal Budget in May, which could influence future economic conditions. Globally, markets are also closely watching inflation trends in the United States, with any surprises likely to impact Australia’s monetary policy path.

Looking Ahead: No Rush to Cut

The RBA is in no hurry to ease rates, preferring to wait for clearer signs that inflation will return sustainably to its 2–3% target range. For borrowers, it means interest rates will likely remain at current levels for some time yet, with the first potential cuts possibly not arriving until late 2025.