Source: Reuters
The Market Online - At The Bell

Join our daily newsletter At The Bell to receive exclusive market insights

The RBA’s streak of 10 consecutive rate hikes has come to an end, with the bank hitting the pause button on further rises — for now.

The decision to retain RBA’s key cash rate at 3.6 per cent in April comes following the central bank’s monthly meeting on Tuesday.

It offers some immediate relief for Aussie consumers, who have experienced steady rises every month since last May, back when rates were at a record low of 0.1 per cent.

However, RBA Governor Phillip Lowe has warned that the door remains ajar to further rate rises in the near future if inflation continues to rise.

“The board expects that some further tightening of monetary policy may well be needed to ensure that inflation returns to target,” Mr Lowe said.

“The decision to hold interest rates steady this month provides the board with more time to assess the state of the economy and the outlook in an environment of considerable uncertainty.”

To pause or not to pause

Despite many experts predicting a pause at RBA’s meeting this week, others were not so sure amid the banking crisis and the announcement of further cuts by OPEC+ oil producers on Monday.

While the money markets were suggesting that as early as last week a 100 per cent pause was likely, City Index Senior Market Analyst Matt Simpson said a pause wasn’t a shoo-in.

“So the pause versus hike debate is much closer to a 50-50 than market pricing implies, and the underlying message of their statement is arguably more important than the act of hiking or pausing itself,” Mr Simpson said.

Following the Reserve Bank’s decision, Mr Simspson now believes that another hike is likely in the future but insists there was a noticeable difference in the RBA’s dialogue following the latest meeting.

“In reality, there’s a decent chance we’ll get another hike, but they seem content that inflation has peaked and opted to ‘not’ pull the hiking trigger ahead of the quarterly inflation report in a few weeks,” he said.

“The RBA concede that monetary policy ‘may’ need to be tightened, whereas previously it said policy ‘will’ need to be tightened.”

While consumers across the country can breathe a sigh of relief, the key takeaway is that the door is definitely not shut to further rate rises if inflation continues.

More From The Market Online
The Market Online Video

Expert Exchange: How to approach Christmas spending amid the cost-of-living crisis

As Christmas comes closer, it may be a good idea to revise some of our thinking…
The Market Online Video

Expert Exchange: Gold charts will remember 2024 in history. Analysts see $3K/oz in 2025

If you had any large amount of money invested in bearish bets on just about anything…
The Patterson South Lake project in Canada that Paladin Energy has just acquired.

Paladin Energy puts Christmas bow on $1.5B all-scrip Fission Uranium merger

Paladin Energy (ASX:PDN) has completed the acquisition of Fission Uranium Corp six months after
The words "Market Open" appear stacked atop one another next to ASX company iconography.

ASX Market Open: Short trade day for Chrissy Eve to barely stay green after yesterday’s rocket run | Dec 24, 2024

The ASX 200 is expected to stay ever so slightly in the green at open on Christmas Eve after the Wall Street Santa