The Reserve Bank of Australia left its main policy rate, the cash rate, on hold at 4.10 percent at its meeting today, in line with the consensus forecast. This follows the 25 basis point reduction in this rate at its previous meeting in February, which was the first cut in the rate since 2020.

In the statement accompanying today's decision, official noted that inflation has fallen substantially since the peak in 2022 and expressed confidence that underlying inflation is moderating in line with their forecasts. However, they also noted that that are cautious about the outlook and are not yet sure that inflation will return to the midpoint of its target range of two percent to three percent on a sustainable basis. Despite ongoing tightness in the labour market, officials remain uncertain about growth prospects, reflecting both external risks and the outlook for domestic household consumption.

Reflecting these considerations, officials concluded that no further rate cut was warranted today and provided little indication that they are ready to ease policy again in coming meetings. Instead, officials stressed that they determined to meet their inflation objectives and will do what is necessary to achieve that outcome.

The market looks for no change in rates from the RBA this time as services inflation stays sticky despite a slowing economy. Like the Fed, RBA on hold, data dependent.

The Reserve bank of Australia (RBA) announces its monetary policy with regard to interest rates on the first Tuesday of each month with the exception of January when it is on vacation. The RBA is the central bank of Australia and its duty is to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people. It does this by setting the cash rate to meet an agreed medium-term inflation target, working to maintain a strong financial system and efficient payments system.

The Reserve Bank of Australia's (RBA's) main responsibility is monetary policy. Policy decisions are made by the Reserve Bank Board with the objective of achieving low and stable inflation over the medium term. Other responsibilities include maintaining financial system stability, while at the same time promoting the safety and efficiency of the payments system. The RBA regards appropriate monetary policy as a major factor contributing to the Australian dollar's stability, which in turn leads to full employment and the economic prosperity for Australia.

The RBA is unique among the central banks - it has two boards with complementary responsibilities. The Reserve Bank Board is responsible for monetary policy and overall financial system stability. The Payments System Board has specific responsibility for the safety and efficiency of the payments system.

The RBA sets an interest rate at which it lends to financial institutions. This interest rate then affects the whole range of interest rates set by commercial banks and other institutions for their own savers and borrowers. It also tends to affect the price of financial assets, such as bonds and shares, and the exchange rate, which affect consumer and business demand in a variety of ways. Lowering or raising interest rates affects spending in the economy.

The level of interest rates affects the economy. Higher interest rates tend to slow economic activity; lower interest rates stimulate economic activity. Either way, interest rates influence the sales environment. In the consumer sector, few homes or cars will be purchased when interest rates rise. Furthermore, interest rate costs are a significant factor for many businesses, particularly for companies with high debt loads or who have to finance high inventory levels. This interest cost has a direct impact on corporate profits. The bottom line is that higher interest rates are bearish for the financial markets, while lower interest rates are bullish.