Central Bank Says Inflation Expectations Remain Unanchored

Highlights from the December meeting minutes:

• The global environment remains volatile and is less adverse than in the previous meeting.
• Regarding the domestic outlook, the recent set of economic activity indicators remains consistent with the economic deceleration scenario expected by the Committee.
• Inflation expectations remain unanchored and are a cause for concern.
• The Committee believes that there has been a significant disinflationary progress, in line with what the Committee had anticipated, but there is still a long way to go to anchor expectations and bring inflation back to the target.
• The Committee reinforces the need to persist on a contractionary monetary policy until the disinflationary process consolidates and inflation expectations anchor around its targets… If the scenario evolves as expected, the Committee members unanimously anticipate further reductions of the same magnitude in the next meetings.
• All members voted for a 0.5ppt cut.

See the full release here.