RBA keeps rates on hold
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The news: The Reserve Bank has kept rates on hold at its May meeting, marking the fourth consecutive meeting where the board has chosen not to change the cash rate.
The numbers: The RBA has kept the cash rate at 4.35% since its November meeting. November's 25 basis point rise followed four meetings of no changes. The RBA has said it will be data-dependent and, while the underlying rate of inflation is slowing, it is still not in the target range of 2% to 3%.
The context: None of the major economists were anticipating a change at today's meeting but there is a growing concern the RBA may consider an additional rate rise or, at least, keep rates higher for longer. This concern has been driven by a resilient labour force and stubbornly high inflation but there are signs of higher rates being felt in some parts of the economy, such as retail where discretionary spending is declining.
The RBA's central scenario in its forecasts is for inflation to be back within its target band by the second half of 2025.
What they said: "The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out," the RBA board said.
The source: Reserve Bank of Australia statement
