Very few economists are expecting the central bank to deliver a cash rate cut on Tuesday, when the Reserve Bank board meets for the second time this year.
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After a long-awaited rate cut in February, most economists and experts believe the official cash rate will remain at 4.1 per cent at the April meeting.
It will be the first meeting for the new-look monetary policy board, with new faces including Australian National University professor Renee Fry-McKibbin.
The monthly consumer price index fell 10 basis points to 2.4 per cent in the year to February. Underlying inflation, the Reserve Bank's preferred metric which excludes volatile price changes, also fell 10 basis points to 2.7 per cent.
While inflation was heading in the right direction, the latest figures were unlikely to convince the Reserve Bank board to cut the cash rate on Tuesday, KPMG chief economist Brendan Rynne said.
"Monthly inflation is volatile, and quarterly inflation figures give a clearer indication of whether inflation is comfortably staying the mid-range," he said.
Geopolitical risks and trade barriers presented another layer of risk, Dr Rynne said.
"These factors will likely contribute to another hold [this] week," he said.
Banks split on number of rate cuts to come
The four major banks have forecast a cash rate hold in April, but are split on how far the cash rate will fall this year.
Westpac and CommBank both expect three cash rate cuts this year, the next one coming in May.
NAB is also forecasting a cash rate cut in May, but is suggesting three further cuts will follow.
ANZ has a more subdued forecast for the year ahead, predicting there will be just one more cash rate cut in 2025 and that it will come in August.
Westpac chief economist Luci Ellis said back-to-back cuts were never on the table.
"The RBA was too hawkish in its rhetoric last month for that and the board made clear that last month's cut did not foreshadow more," she said.
"Cutting again at the April meeting would, therefore, be damaging to its credibility."
Of the 34 experts and economists surveyed by comparison website Finder, 32 predicted a cash rate hold in April.
Professor of economics at Macquarie University Jeffrey Sheen was one of two experts who were optimistic about an April rate cut.
He said headline inflation seemed "settled" within the Reserve Bank's target band of 2 to 3 per cent.
"With the escalating global tariff war and the likely weakening of global economic activity, the RBA should act now in anticipation," he said.
Budget measures could push out inflation forecast
The federal budget, handed down days before the election was called, could complicate the Reserve Bank's ability to cut interest rates, RSM Australia economist Devika Shivadekar said.
She said the budget's inclusion of tax cuts, further energy rebates and financial support for home buyers would alleviate pressure for households but could spur demand-driven inflation.
"While these measures offer short-term relief, we worry about the sustainability of such approaches," Ms Shivadekar said.
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Ms Ellis said the federal government's decision to extend electricity rebates until the end of 2025 would push out the timing for inflation to land sustainably in the target band.
The budget papers showed headline inflation was forecast to rise 2.5 per cent through the year to the June 2025 quarter and 3 per cent the following year when energy rebates will end.
"The RBA will look through this and continue to focus on trimmed mean inflation," Ms Ellis said.
She believes the tax cuts and other spending measures were modest enough to not materially affect the Reserve Bank's outlook.
"Although market pricing did shift a little bit in response to the budget we don't think it really shifts the dial for the RBA," she said.
