RBA Keeps Rates Steady, Says All Policy Options Remain on the Table

SYDNEY—The Reserve Bank of Australia said Tuesday that it still can’t rule out the possibility that interest rates will need to be raised further, adding that inflation remains too high and is expected to remain elevated for some time yet.

The RBA left its official cash rate on hold at 4.35% at its policy meeting. The decision was widely expected by economists.

“While recent data indicate that inflation is easing, it remains high. The board expects that it will be some time yet before inflation is sustainably in the target range,” the RBA’s policy setting board said Tuesday.

“The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the board is not ruling anything in or out,” it added.

The RBA’s guidance was little changed from its policy announcement in February, and will buy it time before the release of first-quarter inflation and economic growth data in coming weeks.

The threat of further interest rate increases stems from the fact that while inflation has fallen to its lowest level in two years, it remains significantly above the RBA’s 2%-3% target band at a time when there is still pressure building under wages, while the center-right Labor government will hand out income tax cuts in the middle of the year.

“The board needs to be confident that inflation is moving sustainably towards the target range. To date, medium-term inflation expectations have been consistent with the inflation target and it is important that this remains the case,” the RBA said.

Inflation continues to be fueled by things like soaring rents and rising electricity and insurance costs, areas of the economy the RBA’s policy instrument of interest rates can only affect at the margin.

The RBA will continue to lag behind many other major central banks that are already pointing toward the probability that interest rates could fall soon.

The lag in Australia is partly due to the fact that interest rates weren’t raised by the same amount seen in other countries, as the RBA wanted to protect employment.

The RBA isn’t forecasting inflation to return to its target band until early 2026, which means inflation will have been outside of the band for close to four years.

Still, the likelihood that the RBA actually does deliver a further increase in interest rates appears low given that the economy’s growth rate is at its slowest in 30 years, while unemployment has risen quickly over recent months.

“The RBA stuck to its hawkish guns at today’s meeting but we think it will pivot towards policy easing by August this year…but the board clearly isn’t letting down their guard,” said Marcel Thieliant , head of Asia-Pacific operations at Capital Economics.

For many Australians, the 2026 Federal Budget initially felt like a direct challenge to the way wealth is created, held and transferred between generations.

The headlines were immediate: changes to capital gains tax, reforms to discretionary trusts, restrictions on negative gearing and increased scrutiny of investment structures. Unsurprisingly, affluent families, business owners and investors began asking the same question:

Is the way we hold our wealth still fit for purpose?

In recent days, the government has announced several significant amendments following industry consultation and public feedback, including exempting testamentary trusts from the proposed 30 per cent minimum tax and expanding capital gains tax concessions for small businesses.

The backdown is welcome. But it also highlights something much bigger.

This Budget has accelerated a conversation that many Australian families have been postponing for years.

The conversation is not really about tax. It is about wealth stewardship.

For decades, Australians have built wealth through businesses, property, investments and careful long-term planning. Yet many families have not revisited the legal structures surrounding those assets in years, sometimes decades.

We often see clients who have spent years building significant wealth, only to discover their legal arrangements no longer reflect their current circumstances.

Their children are now adults. They may own multiple properties.

They may have sold a business, entered a second marriage, become grandparents or accumulated digital assets that did not exist when their original estate plans were prepared.

The trust that distributes income may need to be reconsidered. The bucket company may no longer be so attractive.

The Budget has simply exposed a reality that already existed: wealth structures cannot remain static while life continues to evolve.

Importantly, trusts themselves are not the issue.

Trusts are legitimate planning tools that provide flexibility, protection and continuity. When used appropriately, they allow families to adapt to changing circumstances over time.

And neither is tax the issue, really. Getting the fundamentals right is more important for long-term, sustainable wealth than a few favourable tax treatments around the edges.

The real issue is complacency.

Too often, families create structures and assume the job is done. It isn’t.

Estate planning is no longer a document you sign once and file away in a drawer. It is an ongoing process that should evolve alongside your life.

We are also seeing a broader shift in how Australians define wealth itself. It is no longer just the family home and an investment portfolio.

Modern wealth includes businesses, digital assets, cryptocurrency, intellectual property, frequent flyer points and increasingly complex family arrangements.

At the same time, Australians are living longer than ever before, meaning wealth may need to support multiple generations simultaneously. This creates new responsibilities and new risks.

How do you help your children enter the property market without exposing family wealth to relationship breakdowns?

How do you structure wealth so that it remains a source of opportunity rather than future conflict?

These are the questions families should be asking now.

The recent debate surrounding testamentary trusts also serves as an important reminder that policy decisions can have unintended consequences for vulnerable Australians. It is encouraging that the government has listened to feedback and clarified its position.

But the lesson remains: the wealth landscape is changing.

Increasingly, governments, regulators and tax authorities are paying closer attention to how wealth is held and transferred. That means families cannot afford to adopt a “set-and-forget” approach to their structures.

The families who will be best placed for the future are not necessarily those with the greatest wealth.

They are the families with the greatest clarity. Clarity around ownership, succession and governance. And clarity around how wealth will transition from one generation to the next.

Ultimately, preserving wealth is not about avoiding change.

It is about preparing for it.

Because the greatest risk is not change itself.

It is losing the ability to respond to it.

Anthony Hunt is Co-Founder of Wealth Lawyers and former COO of Westpac Private Bank. He advises business owners, investors and affluent Australian families on wealth protection, succession planning and intergenerational wealth transfer

RBA Keeps Rates Steady, Says All Policy Options Remain on the Table

The RBA left its official cash rate on hold, which was widely expected by economists

The Federal Budget may have softened some of its proposed tax reforms, but it has exposed a bigger issue: too many families are relying on wealth structures that no longer reflect the realities of modern life.