The cash rate remains steady at 4.1%, following the Reserve Bank of Australia’s (RBA) latest policy meeting. While the move was widely anticipated, market participants continue to monitor signals for what might come next.
Reporting from MPA Magazine (mpamag) highlighted a mix of caution and tentative optimism across the lending sector. With inflation still above target and economic indicators sending mixed signals, the central bank’s decision reflects a deliberate wait-and-see approach.
The broader implications for households, brokers, and the economy remain unclear, as attention now turns to upcoming data releases and the evolving political landscape in the lead-up to the federal election.
Economic Context and Central Bank Position
The hold was widely expected, with economists at the Big Four banks agreeing that an April pause was virtually certain — a view some described as “bolted on.” In its statement, the RBA acknowledged both improvements and continuing fragility in domestic economic conditions.
Private domestic demand appears to be recovering, real household incomes have picked up and there has been an easing in some measures of financial stress – the RBA said.
However, businesses in some sectors continue to report that weakness in demand makes it difficult to pass on cost increases to final prices.
The central bank stressed that “sustainably returning inflation to target is the priority,
” while noting that the broader economic outlook “ remains uncertain.
Mortgage Industry and Broker Reactions
The mortgage and lending sector largely anticipated the decision, viewing it as consistent with current economic signals. Mark Haron, executive director at aggregator Connective, called the decision
Expected, even as recent headline inflation showed a slowdown.
Haron added :
Financial pressure remains a reality for many households, and while the Federal Budget included measures to ease cost-of-living pressures, their impact will take time and depend on the outcome of the upcoming federal election.
The most important step for brokers right now is to proactively communicate with their clients. We’ve observed a surge in borrower inquiries for every RBA cash rate decision, so those who reach out first, rather than waiting, will deepen their existing client relationships and create more opportunities.
Expectations for Future Rate Moves
The announcement also drew comments from non-bank lender Bluestone, with CEO Mark Jones stating:
“Given the RBA did not move at this meeting, we believe a rate reduction is warranted and likely in May.”
He added:
“We believe further rate reductions are appropriate through the remainder of 2025, reflecting increased global uncertainty and continued improvement in inflation in Australia.”
The sentiment reflects a broader market expectation that the RBA may be positioning itself for further cuts, assuming inflation continues to trend lower and employment conditions ease.
Inflation Data and Election Timing
According to AMP Bank economist Shane Oliver, “while monthly inflation has continued to trend down and jobs data was mixed in February, the RBA clearly prefers to wait and see the March quarter CPI data to be released later this month.”
He also cautioned that the central bank:
Remains wary about cutting again given its concern that the jobs market is still tight, risking inflation remaining too high.”
Oliver further noted:
“Being in the midst of an election campaign was probably another, albeit unspoken, reason for the RBA to hold in the absence of a strong reason to do anything.”
