Why the RBA may delay cutting the cash rate this month

Why the RBA May Delay Cutting the Cash Rate This Month

Mark Stevenson, Managing Director at Bell Partners Finance (now Evolve Lending & Finance), was featured in Mortgage Professional Australia in February 2025 suggesting the RBA may hold off on cutting the cash rate despite widespread market expectations of a reduction, pointing to global economic uncertainty driven by US President Donald Trump’s trade policies as a key complicating factor.

With the cash rate having sat at 4.35 per cent since November 2023, financial markets were widely anticipating a cut at the RBA’s upcoming meeting. Mark acknowledged that pressure, but his read was more cautious. Trump’s tariff plans and the broader trade war were placing downward pressure on the Australian dollar, which in turn would weigh on the RBA’s thinking about inflation. Given the unpredictability of the new US administration, which had already produced significant policy surprises within weeks of taking office, Mark’s view was that the RBA board would be justified in waiting another meeting to assess how those global headwinds were developing. He noted the board could choose to defer until its March 31 to April 1 meetings to get a clearer picture.

Domestic factors were also still in play. Government spending aimed at easing cost-of-living pressures added to the complexity of the RBA’s calculations, and Mark noted it was still a close call. The central bank was under real pressure to move, but the case for staying on hold remained defensible given how much uncertainty surrounded the global outlook.

If you are weighing your options ahead of the RBA’s decision and want to know whether your current loan is already as competitive as it could be, contact Evolve Lending & Finance for a review.