RBA eyed major interest rate cut for May

Minutes from the regulator's meeting revealed that the Reserve Bank of Australia (RBA) had discussed cutting interest rates by 0.5%. The government primarily used this consideration as a defensive strategy against potential economic shocks stemming from US trade policy. However, the central bank ultimately opted for a more measured approach, deciding to lower the rate by 0.25% and bringing it down to 3.85%.

RBA officials said the domestic economic landscape justified such monetary easing. Declining export figures and weak retail sales data pointed to a slowdown in GDP growth. Uncertainties surrounding US foreign trade policy made the regulator even more worried, as Australia relies heavily on international sales.

Although the immediate effects of trade restrictions have yet to be felt, the RBA is staying vigilant. The bank has emphasized its readiness to react promptly to global economic shifts that could have a substantial impact on the Australian market. According to the regulator’s forecasts, more monetary policy easing is expected, with cumulative rate reductions of 85 basis points by mid-2026.