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CHILE: HSBC Expect Just One Further Cut This Year, In October

CHILE
  • HSBC had expected a 25bp rate cut from the BCCh and as a result of the easing cycle pause, they have adjusted their forecasts, leaving a 25bp cut in October as the only one for the remainder of 2024. 
  • This rate cut will likely be conditioned by external developments and more likely if the Fed cuts in September. Thereafter, HSBC expect a pause until May 2025.
    The statement published after the meeting was mostly on the dovish side, contrasting with the decision, in HSBC’s view.
  • HSBC see the board as being in a wait-and-see mode as it assesses the impact of upcoming electricity price hikes, which should take annual headline inflation above the 4% ceiling of the target, on core inflation and on inflation expectations. That said, the board did not mention electricity prices.

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