Rates On Hold At 1.5%

The decision to keep the official cash rate on hold at 1.5% at the April meeting of the Reserve Bank board came as no surprise.

Unemployment dropped to 4.9% as the labour market improves although the participation rate dropped, that is, fewer people looking for work. However, there is no sign of the flow on effect of improving wages growth which is symptomatic for inflation. At 1.8%, the inflation rate has undershot the RBA’s target range of 2-3% for nearly 3 years.

It’s Macquarie’s view that the RBA will likely keep rates on hold until after the May Federal election. 

Source: Macquarie Group Limited