The Commonwealth Bank of Australia (CBA) anticipates that the upcoming quarterly inflation data, set to be released on April 30, 2025, will come in below the Reserve Bank of Australia's (RBA) forecast of 0.7 percent, which could lead to a potential interest rate cut.

If the anticipated rate cut occurs, homeowners with a $600,000 mortgage could see their monthly repayments decrease by $91.

Based on these inflation forecasts, CBA predicts a high likelihood of a rate cut in May 2025.

Westpac economists believe that employment figures and labor market conditions are unlikely to prevent the RBA from cutting rates in May, as recent data showed only a slight increase in unemployment.

The National Australia Bank (NAB) had previously suggested a potential double rate cut for May but revised its outlook following President Trump's pause on US tariffs.

The trimmed mean inflation rate, which significantly influences RBA rate decisions, is expected to rise by 0.6 percent this quarter, reaching 2.8 percent for the year.

CBA's forecast also indicates that headline inflation may rise to 0.8 percent in March due to the removal of electricity rebates that had previously suppressed inflation figures.

CBA forecasts that headline inflation will fall to 2.3 percent, bringing it closer to the RBA's target range of 2 to 3 percent.

During its April meeting, the RBA maintained the cash rate at 4.10 percent, but indicated that the May meeting would be crucial for reassessing monetary policy in light of new economic data.

CBA senior economist Stephen Wu noted that a 25 basis point rate cut is likely if the trimmed mean Consumer Price Index aligns with or falls below their forecast.

Westpac also predicts a 25 basis point cut, which would lower the cash rate to 3.85 percent, and expects inflation to peak at 2.8 percent in December 2025.