Inflation at 4.6% and a 25bp rise priced for the May RBA meeting
Welcome to Lydian Private Office Perspectives, a monthly briefing designed for trusted advisers and partners working with high-net-worth clients.
Each edition brings together practical insights, real transaction experience, and market intelligence from across our network - with a focus on where lending strategy intersects with broader wealth outcomes.
Our goal is simple: to equip you with ideas, structures, and conversations that add value to your clients.
Feel free to share this with colleagues, friends or clients who may benefit.
Market Observations
The Reserve Bank of Australia is due to meet on this week with a cash rate decision made at 2:30pm on May 5th with markets pricing in a 25bp increase to the cash rate, with the focus to anchor inflation expectations.
Australia already has the highest cash rates in the G10, with many calling the rate cutting cycle in 2025 unnecessary which is now resulting in a sew saw of rate cuts-hike cycles.
Recent geopolitical developments and ongoing energy price volatility continue to influence the lending environment, with higher fuel costs and supply chain pressures beginning to flow through to inflation expectations and business conditions locally. In response, major lenders are increasing credit provisions as a precautionary buffer while also supporting targeted assistance programs for affected sectors, all of which are early signals that banks are positioning for a more cautious phase of the cycle.
Another key date for May is the 12th, when the Federal Budget will be delivered. One of the key topics will include tax reform, in particular potential changes to negative gearing and CGT.