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The Reserve Bank of Australia (RBA) has skipped on delivering its own April Fools' surprise, deciding to keep the nation's cash rate on hold just weeks out from the federal election without explicitly discussing a potential cut.
Meeting for the first time under its new dual-board structure, the RBA monetary policy board left the cash rate target at 4.10 per cent, having delivered a long-awaited cut in February.
Speaking after the decision, RBA Governor Michele Bullock said the board was unanimous in its decision and hadn't seen the need to discuss a cut.
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"The board didn't necessarily discuss a rate cut, but it did talk a little bit about downside risks including the global downside risks," she told reporters.
"But it did not discuss a rate cut.
"So far, the information since February indicates that things are on track and we felt that it was the right thing with the consensus decision."
The decision to keep rates on hold comes amid favourable inflation data and news the nation's housing prices hit a new record high in March, just a month after the first interest rate cut in five years.
In its monetary statement, the board said it was closely watching global economies to understand the impact of US-led tariffs.
"Uncertainty about the outlook abroad also remains significant. On the macroeconomic policy front, recent announcements from the United States on tariffs are having an impact on confidence globally and this would likely be amplified if the scope of tariffs widens, or other countries take retaliatory measures," the monetary policy board said.
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"Geopolitical uncertainties are also pronounced.
"These developments are expected to have an adverse effect on global activity, particularly if households and firms delay expenditures pending greater clarity on the outlook."
While the decision comes with the federal election campaign under way, Bullock said she felt no political pressure from the government to cut rates once again.
"I have a very respectful relationship with the treasurer, and I personally – and the board – have not felt under particular political pressure at all to do anything. We are focused on the job," she said.
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For his part, Treasurer Jim Chalmers said he doesn't "see this decision in political terms".
"I'm sure that the independent Reserve Bank doesn't see it in political terms either," he said.
"We've already seen rates start to come down this year. That's a very good thing. It's a reflection of the progress that we've made together in the economy."
While saying he doesn't make predictions about the future, Chalmers did remind voters about the "overwhelming expectation of a rate cut in May" and later in the year.
"That's the expectation of the market. I don't get into those sorts of predictions," he added.
Many economists still forecast the RBA to drop interest rates further in 2025.
"The outlook for interest rates remains positive, with the cash rate likely to reduce further in 2025, but only gradually," said Tim Lawless, Research Director at CoreLogic.
"The quarterly inflation outcome, which will be released on April 30th ahead of the RBA's next board meeting, will be a key factor influencing the RBA's decision in May.
"If core inflation holds below the 3 per cent mark, which seems highly probable, it is looking more likely that we will see a second cut to the cash rate."
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Three of the big four banks in CBA, Westpac and NAB are forecasting as many as three more interest rate cuts this year, while ANZ expects one more interest rate cut in August.
Geoffrey Kingston from the Macquarie University Business School said while the RBA is fully independent, it would not want to become a major talking point just weeks out from the federal election.
"Another rate cut coming soon but not just yet – it's not urgent, and the bank will want to keep a low profile during the election campaign," Kingston said.
"By the same token, February's significant fall in full-time employment heralds downward pressure on inflation.
"Likewise, February's inflation print was lower than expected."
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