A rate cut was a 50/50 bet, so despite heightened media, market and public interest in the May Reserve Bank board meeting, it shouldn't come as surprise the outcome was the same as the previous 30 such get togethers.

Key points: RBA lowers its rate cut hurdle by saying the labour market needs to improve

RBA lowers its rate cut hurdle by saying the labour market needs to improve Jobs and wages data will be crucial in any decision to cut official interest rates

Jobs and wages data will be crucial in any decision to cut official interest rates RBA still has concerns about rate cuts leading to higher household debt

The big hint nothing would change could be found in last month's minutes from the board which argued, "There was not a strong case for a near-term adjustment in monetary policy."

The weak, getting weaker, inflation figures that lobbed between the April and May meetings didn't change that stance.

"Members recognised that it was not possible to fine-tune outcomes and that holding monetary policy steady would enable the bank to be a source of stability and confidence," was the key phrase from the minutes.

In other words, the RBA put a higher price on preventing another borrowing binge than nudging up inflation and economic growth.

The other point implicit in the statement was any move would not just be a 25-basis-point fiddle or 50-basis-point fine tune — if things were serious enough to move, the cuts would be more of a wholesale nature, taking the current cash rate of 1.5 per cent perilously close to zero.

That doesn't mean rates won't be cut, just not now.

A full 0.25-percentage-point cut is priced in for July and the market has priced in two cuts by early next year.

However, the RBA set two clear conditions for a cut: inflation continuing to undershoot the 2-to-3 per cent target and unemployment to start rising.

First quarter inflation met its part of the bargain, and a bit more, by tracking further down. Unemployment can't seem to drop meaningfully below 5 per cent, but it hasn't risen much above it either.

Unemployment the trigger

With inflation sidelined as an issue until the second quarter data is released at the end of July, the focus is now squarely on unemployment as the big swing factor in the RBA's policy settings.

RBA governor Philip Lowe stuck resolutely to his belief GDP growth would somehow clamber back to 2.75 per cent this year and the labour market was in solid shape.

However, the big bet is jobs growth will motor on, suck up spare capacity and push inflation back into the RBA's comfort zone.

"[The board] recognised that there was still spare capacity in the economy and that a further improvement in the labour market was likely to be needed for inflation to be consistent with the target," Dr Lowe said.

"Given this assessment, the board will be paying close attention to developments in the labour market at its upcoming meetings."

So will everyone else. A softening construction sector is not a great start.

One thing is clear though, it's no longer a question of unemployment rising to say 5.5 per cent to trigger a cut, just stagnating around current levels would probably be enough.

Monthly jobs data will be printed three more times before the next inflation figures are dropped. The Wage Price Index next week will be a key measure for the data-dependent central bank, as will the next GDP number in early June.

Debt bubble worries remain

But an important point often lost in the noise about rate cutting is the financial stability angle.

The debt-to-income ratio hasn't fallen and, having wrestled it to a sort-of-standstill, the RBA would be loathe to ignite another household borrowing binge by cutting rates closer to zero.

The RBA board also doubted it would get much bang from its rate-cut buck.

"They recognised that the effect on the economy of lower interest rates could be expected to be smaller than in the past, given the high level of household debt and the adjustment that was occurring in housing markets," the April minutes pointed out.

The RBA's hunch is a cut or two will do little change consumer behaviour, and probably less to fire up business investment.

On that second point, there is some supporting evidence from the recent NAB business survey.

Interest rates finished well down the list — 14th to be precise — in terms of business worries. The political and economic outlook were the top two concerns.

What would a cut have delivered?

Just how much of a cut would have made it through to borrowers is open to question.

The 13 cuts since 2011 have, on average, delivered 90 per cent of RBA's cuts, excluding the out-of-cycle adjustments along the way.

Given that much of the funding pressure banks were under when they raised some home loan rates last year have disappeared, it is not difficult to see mortgage and deposit rates being cut by 0.2 percentage points if the RBA had moved on Tuesday.

That wouldn't be great for the $1.1 trillion worth of deposits parked with the banks, but would be welcomed by those who have chalked up $1.9 trillion in mortgage debt.

The RBA was never likely to leap down the lift well on interest rates, it is just not its style.

It takes the stairs, often slowly.

The more dovish sentiment in the governor's statement and the greater prominence given to unemployment brings it closer to a downward trek.

Friday's Statement on Monetary Policy, with the expectation it will cut its forecasts for economic growth and inflation, will probably inch things forward.

The RBA has shown it is in no rush to move. Given the data flow in coming months, something like August is looking a better bet for a cut.