The Reserve Bank of Australia is expected to leave interest rates on hold today when it finishes its two-day meeting.

Mortgage holders received a long-awaited cut to the cash rate in February, the first in five years, but it is widely anticipated the RBA will leave it at 4.10 per cent when the announcement is made at 2.30pm (AEDT).

Hopes for a further reduction have been lifted by last week’s inflation figures showing headline inflation is within the target range of the RBA.

The monthly consumer price index (CPI) figures from the Australian Bureau of Statistics showed headline inflation slowed to 2.4 per cent over the 12 months to February, still well within the central bank’s target band and down from 2.5 per cent the month before.

But other factors should ensure the RBA errs on the side of caution today.

One of them is US President Donald Trump’s “Liberation Day” on Wednesday (Thursday AEDT) when he’s expected to announce a new round of sweeping tariffs.

Worries that they will worsen inflation in the US and other countries, including Australia, and grind down growth for economies has resulted in falls on global stock markets.

On Wall Street overnight, the S&P 500 was down 1.3 per cent following one of its worst losses of the past couple of years last Friday. It’s on track to finish the first three months of the year with a loss of 6.4 per cent, which would make this its worst quarter in nearly three years.

Leading up to last week’s inflation numbers, economists had been extremely sceptical of a rate cut today with the market pricing in a 92 per cent chance the cash rate will remain on hold at 4.10 per cent.

Another factor for the RBA to consider is the current federal election campaign, with the central bank wanting to keep a low profile up to polling day on May 3.

A bright spot for mortgage holders is that economists are tipping a reduction in the cash rate next month.