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BCCh Analyst Views

CHILE
  • **Goldman Sachs: Given the explicit forward guidance, their policy rate baseline for the next two meetings (September and October) is for two additional hikes of 50bp apiece. The policy rate baseline will be adjusted up or down depending on incoming data and the overall tone of the September IPoM.
    • Inflation data, the evolution of inflation expectations, and the evolution of the CLP will be key to fine tune their policy rate baseline, but at this juncture the risk around their preliminary call for a 50bp hike at the September meeting is skewed towards another 75bp rate hike.
    • GS expect the MPC to be particularly attentive to signs of a more pronounced pass-through following the strong depreciation of the CLP (over +20% since the June meeting), the behavior of inflation expectations, and the calibration of monetary policy by the FOMC and central banks in other core economies.
  • **JPMorgan: While acknowledging considerable macroeconomic risks, the Board decided to send a signal by hiking less than what was priced in, a risky move.
    • In JPM’s view, the Board decided to avoid tightening more than 75bp this month likely with the idea of gaining time to better gauge the probabilities of global recession ahead. But the premium of such option, amid the current market conditions, may prove onerous.
    • In terms of their own forecasts, despite the 75bp hike they signal upside risk for both Dec-22 and Dec-23 inflation, while mark the terminal rate higher by 50bp, to 11%. JPM flag nonlinearities may play more of a role going forward.
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