Greg's Opinion- RBA holds Interest Rates

Wow!

What a surprise, I don’t know anyone who didn’t think interest rates would be reduced by at least 25 basis points at today’s RBA meeting.

In case you haven’t heard the RBA has taken a VERY conservative decision and kept the cash rate at 3.85%. The only reasoning I can imagine, without reading their full decision, is that they want to wait and see what happens globally with tariffs etc. The employment figures were also strong with the majority of new jobs being created in the government sector. This may mean the board is concerned of the effect this may have on inflation with more disposable income circulating. Inflation may be an issue and the board has decided to wait until the June figures come out later this month before making a decision. Remember the board meets again next month and they will have a full set of annual figures on which to base a decision.

 I do note that we can’t blame the governor of the RBA as 6 of the 9 board members voted to keep the rates on hold with only three voting for a reduction. So, the question is, will there be a reduction next month? Most pundits would predict a reduction, but as with today, anything could happen.

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