A rate hold at 3.85% was predicted by only a very small minority of economists, while markets were of course almost fully priced for a 25bps cut. As such, it’s a big surprise. But it likely means a delay of only one further month until the next interest rate cut. The decision to not follow up May’s rate cut with another move in July likely reflects the RBA Monetary Policy Board’s desire to continue to receive additional certainty on the inflation front from the full June quarter CPI to be released in late July, together with a full forecast update from the Bank’s staff in August. By that time, the Board will have received additional information on tariff developments with a lot of information to be released this week. Australia’s continuing very low unemployment rate, and the fact that the next Board meeting is only one month away, meant the Board did not have to make a quick follow up rate cut at this meeting.