The RBA's decision to hold the national cash rate again dominated headlines across the country this week, but is the coverage warranted?
Will they or won't they?
It was the question asked well before the Reserve Bank of Australia's monthly meeting on Tuesday, as experts across the real estate and finance sectors speculated whether there would be a pre-election cut to the national cash rate.
The RBA decided to hold the rate at 1.5%, marking 30 consecutive months since the last change.
RBA decision - What they said
The lead-up and subsequent fallout of the meeting suggest the cash rate's overall influence on the economy may not have warranted the extensive coverage it was given.
On the Reserve Bank of Australia website, the cash rate is described as the "instrument" used to influence inflation to achieve a flexible medium-term target.
Prior to the meeting, Finsure Group Managing Director John Kolenda told WILLIMAS MEDIA it was important to remember that banks were in a position to lower rates independently.
"Although the RBA remains in its long-standing hold, banks are actually in a position to lower their rates independently of any decisions by the central bank," he said.
"Their funding costs have been falling and they could cut rates to offset some increases they imposed last year that were driven by rising funding costs."
The banks have also had their say on the level of impact a potential rate cut would have in recent weeks.
Westpac Chief Executive Brian Hartzer told The Sydney Morning Herald ahead of the RBA meeting that "interest rates were not the problem" with the current economy.
"Certainly a reduction in interest rates will help a bit on consumer spending" he said.
"But the question we should be asking is, how do we get businesses to invest, to grow, and employ more people, which would raise wages and support spending?"
The current lending climate is often discussed in association with any potential rate cut, with a mortgage rate reduction able provide some support for housing demand.
Despite this, Housing Industry Association Chief Economist Geordan Murray said there was no easy fix when it came to curbing Australia's housing downturn.
"Had the RBA lowered rates, it may have eased some of the pressures in the housing market, but the acceleration in the downturn in building activity during 2018 was largely due to regulatory imposts from state and Federal governments," he said.
“Governments should be looking at measures to make home ownership more accessible to households, both as owner-occupiers and investors.
“Removing the counter cyclical measures introduced at the peak of the housing cycle would be a good place to start."
By Sean Slatter
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Rates expected to be cut in the second half of the year as RBA decides to hold