Australia is “making progress” in the fight against inflation, but the path for interest rates remains uncertain, RBA boss Michele Bullock says.

Speaking on Tuesday after unveiling another pause in rates, Bullock said the RBA still needed “greater confidence” that inflation would ease back into its 2-3 per cent target band from its current 4.1 per cent.

“The war isn’t yet won, so we continue to be vigilant, and we can’t rule anything in or out,” Bullock said.

The RBA opted for another pause in interest rates on Tuesday after a two-day meeting of central bankers that started on Monday. It was the second meeting in a new format for the RBA that followed an independent review.

It is the third time in a row the central bank has paused the cash rate target at 4.35 per cent – a 15-year high – as economists continue to mull incoming data about easing inflation and growth.

Treasurer Jim Chalmers welcomed the latest pause, saying it reflected efforts to mitigate the cost-of-living crisis.

“This decision is a reflection of the good progress we are making as a country in the fight against inflation,” Chalmers told Parliament on Tuesday afternoon.

“It gives us confidence that inflation is moderating in welcome and encouraging ways.”

The decision to keep interest rates on ice in March was widely expected by economists, who have predicted the next move will be down – though opinions differ on when it will come.

Major bank forecasters have pencilled in dates later this year, while others warn relief may not be on the horizon until 2025, despite easing inflation and slowing economic growth.

The RBA itself has kept the possibility of a hike on the table, at least rhetorically, in a bid to ensure its credibility as the outlook for price growth remains robust throughout 2024.

This so-called “hiking bias” was maintained in March, with central bankers reiterating that the battle against inflation won’t be over until the 2-3 per cent target band is achieved.

“While recent data indicate that inflation is easing, it remains high,” the RBA said on Tuesday.

“The board expects that it will be some time yet before inflation is sustainably in the target range.

“The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.”

On current forecasts that will happen sometime in late 2025, though price growth has eased faster than the RBA has anticipated in early 2024, raising the prospect of revised modelling.

“Global and domestic inflationary pressures continue to ease and there is a solid chance that core inflation returns to the RBA’s target ahead of schedule,” Indeed APAC economist Callam Pickering said.

“Rate cuts in the second half of the year are a distinct possibility, albeit far from certain.”