RBA tipped to hold rates steady in crucial mid-election rate decision
Politics and economics are set to collide this week with the RBA's Michele Bullock fronting media in the first few days of a federal election campaign.
The Reserve Bank meeting is the headline event this week for domestic financial markets. But it will be what RBA governor Michele Bullock says, rather than what she does, on interest rates that will generate the most attention against the backdrop of a federal election campaign.
Here’s what you need to know about the key economic data points this week.
Rate decision
The event: Reserve Bank rate decision and post-announcement press conference
When: Tuesday 1 April 2025
What to expect: Better than expected monthly inflation data is not expected to shift the dial and the majority of economists think the RBA will keep rates on hold at 4.1% on Tuesday. Among them is AMP deputy chief economist Diana Mousina who thinks 25 basis point cuts in May and August are more likely — similarly to the two to three cuts expected by the market. Commonwealth Bank economists also think rates will be steady with a cut in May and they think the central bank's stance will become intentionally more dovish this week.
Clearly, the language in the statement and press conference is going to be particularly important. ANZ economists, who anticipate no more cuts until August, think the “tone and language … will not pre-commit the board to a May interest rate cut” and expect it to continue describing the labour market as tight and to remain cautious in the outlook. Productivity growth could also get a mention, the analysts said, given its risk to the outlook. They’re eager to see how the RBA will describe the global environment in light of US trade policy and geopolitical instability, given the February meeting didn’t overly focus on this situation.
