What to expect from the RBA meeting in April 2025

After the long-anticipated rate cut in February 2025, the question on the minds of many Australians is what’s next for the Reserve Bank of Australia (RBA)? While economists from the big four banks aren’t expecting movement at the next RBA meeting, it’s less certain when the next rate cuts are most likely to arrive.

This upcoming monetary policy meeting to take place over 31 March to 1 April 2025 will be the first under the new dual-board structure. In this arrangement, one specialist RBA board will look after monetary policy, while the second manages the RBA’s other governance duties.

RBA

In the past, the RBA has referred to its goal of bring Australia’s inflation down to a target band of between 2% and 3% as a “narrow path”, as too much or too little intervention from the central bank could result in problems for the nations’ economy, not to mention the personal finances of everyday Australians. And while RBA deputy governor Andrew Hauser said in a recent speech that the bank may soon be able to move on from the narrow path, “central bankers are paid to worry, not celebrate.”

Additionally, RBA assistant governor, Sarah Hunter, recently said that because any decisions the EBA makes need to be made in an uncertain environment, it’s important to consider risks to its central forecasts. These risks include the potential impact of US policy settings on the global economy, and in turn Australia.

“The February decision reflected a judgement by the Board that it was the right time to take some restrictiveness away, but the Board were more cautious than the market about prospects for further easing.”

Federal Government

Federal Treasurer, Jim Chalmers, has said in interviews that while he welcomed the last RBA rate cut, he does not want to make predictions about future movements in interest rates. However, he also said that he shared the RBA governor’s view of being optimistic about the future, but alive to the risks in the economy:

“There’s a lot of global economic uncertainty right now in particular, but we can be confident but not complacent about the future of our economy, given the progress that Australians have made together over the course of the last couple of years.”

ANZ

ANZ head of Australian economics, Adam Boynton, has said that only one more rate cut is expected from the RBA this year, and that may not take place until later in the year. That said, it’s possible that the RBA could make more cuts depending on economic events around the world:

“Global policy uncertainty is the key risk with negative growth impacts to outweigh the risk of higher prices in the short term, potentially necessitating more RBA easing than is in our base case.”

Additionally, ANZ senior economist Adelaide Timbrell recently said that while the February 2025 monthly Consumer Price Index (CPI) indicator recently came in below expectations, “the RBA is likely to look through this slight drop in the headline and may find the monthly trimmed mean result encouraging for disinflation progress but only at the margin.”

Commonwealth Bank

Commonwealth Bank head of Australian economics, Gareth Aird, has said that while recent data has proven softer than forecast, this is unlikely to sway the RBA enough to cut the cash rate this meeting.

As for the next cash rate cut, this is being forecast to arrive in May 2025, depending on inflation data behaving as forecast:

“…we think that a Q1 25 trimmed mean outcome below the RBA’s 0.7%/qtr forecast means a 25bp rate cut in May is a done deal.”

Mr Aird also acknowledged geopolitical and policy uncertainty as potential risks for the RBA to consider, which could lead to more ‘dovish’ messaging from the RBA following the next rate announcement.

NAB

Following the release of the Federal Budget, NAB economists Alan Oster and Gareth Spence said that there would likely be minimal impact on the RBA’s future decisions, with the central bank most likely to focus on the labour market and rebounding household consumption.

“We continue to expect four more rate cuts through to February 2026, which will bring the cash rate to 3.1%.”

NAB also flagged global uncertainty around tariffs and the performance of key trading partners as risk for the RBA to consider.

Westpac

Westpac chief economist, Luci Ellis, has said that the RBA was “too hawkish” following its last meeting to consider a cut at this one, adding that cutting again in April 20025 would be “damaging to its credibility.”

“While we still expect a rate cut in May, back-to-back cuts in February and April were never on the table.”

Looking beyond April, the pace of future cuts may depend on factors such as the labour market, wages, consumption and trimmed mean inflation. But based on Westpac’s forecasts, the RBA is likely to cut three more times this year, bringing the cash rate to 3.35%.

To help you stay up to date with the latest updates to the national cash rate, as well as the changes to interest rates on home loans and savings accounts that follow, check Canstar’s RBA cash rate tracker or download the Canstar app.

Cover image source: AboutLife – Raev Denis/Shutterstock.com