As widely expected, the RBA has left the cash rate unchanged at 4.35 per cent for the fifth consecutive time, but stressed that they can’t rule anything “in or out” in light of recent strong jobs and inflation data.

According to the RBA, current monetary policy is set at the right level to eventually move inflation into the target band of between 2 to 3 per cent.

"Inflation is easing but has been doing so more slowly than previously expected and it remains high. The board expects that it will be some time yet before inflation is sustainably in the target range. While recent data have been mixed, they have reinforced the need to remain vigilant to upside risks to inflation," the bank 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."

In short, it seems that the RBA will continue to maintain pressure and will only lower interest rates if and when inflation is well and truly under control. Pundits are currently predicting rates to fall in early 2025. That said, if inflation picks up in the coming months, there is room in the RBA’s arsenal for another rate hike.

The next RBA meeting is scheduled for August.
Rick Maggi, CFP