FX.co ★ RBA Cautious on Rate Outlook: April Minutes

The Reserve Bank of Australia (RBA) remains uncertain about the timing of any future adjustments to interest rates, as reflected in the minutes from their April meeting. The board underscored the importance of staying responsive to data and vigilant regarding emerging risks. During the meeting, the central bank decided to maintain the cash rate at 4.35%, citing a gradual easing in inflation alongside a persistently tight labour market. Financial conditions were described as somewhat restrictive, with the economic forecast aligning closely with previous predictions. The board recognized the dual risks of domestic demand and wage increases potentially driving inflation higher, contrasting with the possibility of an ongoing soft labour market or weak consumer spending accelerating disinflation. Additionally, they noted that the energy rebate extension announced in the federal budget would influence the trajectory of headline inflation for 2025 and 2026. On a global scale, risks have intensified, particularly due to trade policy uncertainty, although the impact on Australia remains minimal.