Despite a rebound in consumer spending aided by government tax cuts, uncertainty remains due to global trade tensions, particularly from U.S. tariffs.

Despite this recent cut, RBA Governor Michele Bullock cautioned against expecting immediate further reductions, emphasizing the need for more data.

The RBA remains cautious about easing monetary policy, considering evolving global risks and the mixed economic signals currently present.

Concerns persist regarding the potential instability of Australia's inflation rate, which could fluctuate in either direction.

With low unemployment and rising economic growth, the RBA is likely to pursue gradual rate cuts, albeit more cautiously compared to other central banks.

Market predictions indicated only a 10% chance of a rate cut before the upcoming May meeting, reflecting a consensus that no immediate changes were expected.

The decision to keep rates steady means the center-left Labor government will not benefit from a potential rate cut just before the general election on May 3, 2025.

Bullock emphasized the importance of reducing inflation to eventually lower interest rates, acknowledging the financial struggles of homeowners.

The Reserve Bank of Australia (RBA) announced its cash rate decision on April 1, 2025, following a recent cut to 4.1 percent in February, which was the first reduction in over four years.

Most economists predict that the RBA will implement two rate cuts this year, with the first expected in May, following the federal election.

While lower interest rates could alleviate cost-of-living pressures, there are concerns they may risk overheating the housing market as the election approaches.

Approximately 75% of economists forecast a 25 basis point cut to 3.85% in May, pending the release of detailed quarterly inflation data.