Bill Evans, analyst at Westpac, points out that the Westpac correctly forecast that the RBA would remain on hold at the May Board meeting.

“The Bank was clearly less concerned about the March quarter Inflation report and emphasised the importance of developments in the labour market. Westpac continues to expect rate cuts at the August and November Board meetings. The Reserve Bank Board decided to leave the cash rate unchanged at 1.50%. There are two main reasons behind this decision. Firstly, the RBA’s response to the recent March quarter inflation report was not as negative as had been expected. The second issue of importance was the Board’s noting in the April meeting minutes that “members also discussed the scenario where inflation did not move any higher and unemployment trended up, noting that a decrease in the cash rate would likely be appropriate in these circumstances. We expect that this sequence of weak inflation and softening labour market data will persist throughout 2019, which is consistent with our growth forecast of 2.2% compared to trend of 2 ¾ per cent. That profile remains consistent with the need for further stimulus at the November meeting following the August cut.”