NAB Forecasts Cash Rate Cut in May 2026: A Double-Edged Outlook

Australia’s economy has once again reminded us how unpredictable it can be. NAB has pushed back its forecast for the next cash rate cut to May 2026, citing “higher-than-expected” CPI data that poured cold water on earlier hopes of a 2025 cut. For homeowners, investors, and everyday Australians, this news is both sobering and instructive.

The Positive Side: Caution Over Complacency

On one hand, NAB’s decision to hold off on predicting an early cut reflects prudence. Inflation rose to 3% – the highest level since July 2024 – and ignoring such signals could risk destabilizing the economy further. It’s better to see the Reserve Bank act cautiously than to rush into cuts that might fuel another inflation surge.

This conservative stance may give markets and policymakers time to stabilize expectations and prevent overconfidence. It also underlines the importance of data-led decisions, not just optimistic forecasts.

The Negative Side: Households Left Waiting

On the flip side, the delay is a bitter pill for many Australians. Mortgage holders already struggling under rates above 6% face the reality of thousands of extra dollars in repayments. For families counting on relief this year, May 2026 feels a lifetime away.

It’s also a reminder of how fragile “forecasts” can be. What once seemed likely in November or February has now been pushed back again – and could shift further. That unpredictability erodes consumer confidence and makes financial planning harder for households and small businesses alike.

My Takeaway

Forecasts will continue to move with each new data release, but the lesson here is clear: don’t anchor your personal finances to what the banks say might happen. Prepare for delays, cushion your household budget, and treat any eventual cut as a bonus, not a guarantee.

Because if there’s one constant in economics, it’s that uncertainty is always around the corner.