RBA interest rates recap: Reserve holds at April meeting as it awaits election, tariffs fallout

The Reserve Bank’s first meeting after providing long-awaited interest rate relief to millions of homeowners just had to fall on April Fools Day, didn’t it?

Under the cover of lighthearted frivolity, we could easily spin you some wildly outrageous yarn about the bank repossessing RBA governor Michele Bullock’s home or the entire RBA board quitting en masse to start their own Dire Straits cover band (Money for Nothing, anyone?)

But, as we’ve learnt the hard way over the past few years, joking about the perilous state of people’s finances and the economy in general is about as cringeworthy as a Meghan Markle cooking show.

Also, in these crazy times when it seems that anything - no matter how absurd - is now possible, it’s getting harder to separate fiction from the holy-crap-did that-really-just-happen facts.

Yes, as Dylan told us: Times, they are a changin’.

But one thing that certainty wasn’t shifting today was the official cash rate, which dropped to 4.1 per cent at the last RBA meeting in mid-February.

Why? Well, there’s a Federal election around the corner and the central bank board will be very happy to keep its powder dry and well away from any suggestion of playing politics, particularly when the campaigns are so focused on the cost of living burden.

But, more importantly, the case for more relief is still pretty flimsy.

Most market punters agree there’s a few more cuts to come this year, but we’ll likely have to wait until at least May for the next one.

Inflation is still moderating, and is within the RBA’s preferred 2 to 3 per cent target band, but the board is likely to want to see a broader set of numbers before cutting again.

Then there’s the Trump card. The US President is preparing to unveiling sweeping global tariffs tomorrow. While Australia may yet avoid a direct hit, the ramifications for the world’s biggest economies could be substantial and send plenty of aftershocks our way.

The RBA wants to hold fire for now until it has a better idea of what lies ahead.

For those who did bet on a cut may have done well to recall the adage “a fool and his money are soon parted”.

Sorry.