Members of the Reserve Bank of Australia board are preparing to assemble for the June interest rate meeting where economists broadly expect no change.
The two-day meeting kicks off on Monday for what’s thought to be a straight-forward decision, with the RBA likely to hold tight at 4.35 per cent and keep waiting for more convincing signals on inflation.
While well down from its peak, inflation re-accelerated in April, suggesting stretched borrowers will be waiting a while longer for interest rate cuts.
Yet higher interest rates are clearly working to slow the economy, with the March quarter national accounts showing a minor 0.1 per cent lift in gross domestic product and the labour market weakening in response, albeit very slowly.
Economic teams at all four of the big banks were expecting the benchmark rate to stay at 4.35 per cent in June and are forecasting cuts by the end of the year, in the case of Commonwealth Bank, National Australia Bank and Westpac, and for ANZ, a February 2025 start.
The post-meeting statement and press conference with Reserve Bank governor Michele Bullock should provide more information on the bank’s assessment of the economy following the latest run of data.
In recent communications, the RBA has been leaving its options open on rate moves up or down, preferring not to “rule anything in or out” and choosing to stay responsive to incoming data.