Consistent with market expectations, the Reserve Bank of Australia (RBA) has held the cash rate at 4.10%. This comes after the RBA’s considered tone in communications, including the first econometric cut in a series of cuts, the 25-basis-point cut in February, after more than four years of holds. The RBA’s caution contributes to its attempt to control inflation and balm the state of the economy as the growth rate is hovering around the 2-3% mark.
RBA Hikes Cash Rate to 4.10% -Despite the costs increasing, the RBA held it the same rate. Borrowing costs have soared, and so has the RBA’s cash rate. Find out how this impacts your home loan affordability and why engaging a buyer’s agent could be beneficial for helping you understand the market. Source: RBA Media Release – April 2025
Reasons for Understanding RBA’s Announcement
Hold actions in cash rate in economically unstable regions are attributed to inflation control and attempt to sustain the growth rate in the 2-3% threshold. The latest quarterly inflation results show that the consumer price index (CPI) stands at an annualized value of 2.4%, which is a decline, considering that projection is achieved, suggesting that the economy is responding. This proves that the economy is progressing towards attaining price equilibrium and full employment.
As stated by Michele Bullock, RBA Governor, reducing the core inflation period is a positive step. Still, the bull is cautious, admitting that there are many risks concerning both sides of the story, and intends to cooperate closely with all concerning global and local demand changes.
Anticipated RBA Meetings and Market Outlook
The RBA’s next meeting will occur on 19-20 May. Banks like Westpac and NAB expect the RBA to lower the rates three more times before the end of the year. Conversely, ANZ has a more tempered view and only predicts two cuts before the RBA pauses in 2024. There are also new market expectations, which suggest that rate cuts will be less frequent in 2025 than previously planned. ANZ’s predictions reflect the RBA’s slow policy shift, which uses inflation to guide growth sustainability.
Inflation and the Economy
The RBA needs to change focus in the short to midterm by lowering inflation to the target range of 2-3%.
According to the latest quarterly inflation data, the Consumer Price Index (CPI) is at 2.4% annualized, showing a decrease that suggests the economy is responding well to policies. The RBA, however, remains cautious regarding the trajectory of inflation and the impact of global uncertainties, including geopolitical conflicts and trade policies. The central bank remains focused on international economic activity, the domestic economy, and the demand for labor to inform future decisions.
Therefore, whether you are in the early stages of property hunting or are eager to strike a deal, enlisting the service of a buyer’s agent can help you lay down a clear roadmap toward accomplishing your property objectives.
Huddle For Property offers personalized support to provide you with the correct information needed to make a property purchase decision. With a strong understanding of the local market, let our experts guide you in locating a property that meets your specifications and budget. We aim to provide exceptional service and trusted guidance throughout your journey. Contact us at 480758738/ book your consultation to get started.