The Reserve Bank of Australia (RBA) has expressed caution about potential interest rate cuts, noting that May would be an “opportune time” to reassess policy settings.

This statement comes from the minutes of its April meeting, which took place just before US President Donald Trump initiated a series of tariffs that have caused turbulence in global markets. 

The central bank board said that it was still uncertain about when the next rate change would occur, according to the minutes from the 31 March-1 April meeting, which were released in Sydney earlier this week.

The board decided it was best to keep the benchmark rate at 4.1%, following its first rate cut in four years in February, due to the lack of any major data that would change the outlook for Australia's economy, Bloomberg reports.

The RBA’s April meeting took place just before Trump's “Liberation Day” tariffs triggered global shockwaves and significant market turmoil.

Concerns about the potential impact of the announcement helped explain the cautious tone in the minutes.

That said, the RBA indicated that a rate move could happen as early as next month.

By the 19-20 May meeting, the board will have access to updated data on the labour market, inflation, household spending, a new set of staff forecasts, and “further information about the likely evolution of global trade policies”, according to the minutes.

“Collectively, this information would have a considerable bearing” on the decision, it said.

The bank also concluded that the unexpected decline in employment in February was more likely a statistical anomaly than a shift in labour demand.

Financial market pricing suggests a possibility of a 50-basis-point cut next month, with traders anticipating that the RBA will reduce borrowing costs at least three more times later this year.

The board's discussion on the impact of global tariff policies on Australia highlighted that a key factor would be how the Chinese authorities choose to respond.

“Importantly, the board would need to monitor closely the implications of global developments for Australian inflation,” the minutes showed.

Last week, Governor Michele Bullock urged patience as policymakers work to understand how the new US tariff regime might impact global demand and supply.

Bullock anticipates continued market and economic volatility but stated that Australia's financial system is robust and well-positioned to handle external shocks.

Moreover, the minutes revealed that risks to the global outlook were skewed to the downside. Board members agreed that a substantial rise in tariffs or other trade restrictions could “materially disrupt” global trade, prompting businesses and households to cut back on spending.