Australia's biggest bank has declared the fight against inflation has been won. Commonwealth Bank (CBA) is tipping the Reserve Bank of Australia (RBA) will cut interest rates on Tuesday and "leave the door ajar" for another rate cut in July.

CBA head of Australian economics Gareth Aird expects the central bank will cut the cash rate by 25 basis points to 3.85 per cent on Tuesday. It comes after the RBA left the cash rate on hold in April, with a cut not explicitly considered.

“It is an understatement to say that a lot has happened since the April Board meeting,” Aird said.

“US trade policy has been erratic. And this has led to significant uncertainty around the global economic outlook.”

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Aird thinks the RBA will acknowledge this but will place more weight on Australian data, which has been broadly tracking in line with the central bank’s forecasts.

Australia’s inflation rate rose 0.9 per cent in the first quarter of the year, with the annual rate holding firm at 2.4 per cent.

Underlying inflation, the RBA’s preferred measure, increased by 0.7 per cent, with the annual rate easing to 2.9 per cent.

Aird said these figures will give the RBA more confidence that the “inflation ‘fight’ is being won”.

“Our view is that the proverbial inflation dragon has been slayed,” Aird said.

"But we are not convinced the RBA will share that view just yet given the unemployment rate is still below the RBA’s estimate of the NAIRU (non-accelerating inflation rate of unemployment)."

Wages grew by 0.9 per cent in the March quarter, with the annual rate increasing to 3.4 per cent, which was a bit stronger than expected.

The unemployment rate remained steady at 4.1 per cent for April, but 89,000 more Australians were in jobs than the month before, which was also more than economists expected.

Markets are also "fully priced in" for a standard 25 basis point cut on Tuesday.

'Door open' for back-to-back rate cuts

Commonwealth Bank expects the RBA will cut the cash rate again in August and November, but said the RBA would likely "leave the door ajar" for a July cut by simply not providing any forward guidance.

"Its communication strategy on Tuesday will not lock the RBA into a preset path," Aird said.