CNB Hawk Holub Says Central Bank Could Start Cautious Rate Cuts In 1H2024

CNB's Tomas Holub told Hospodarske Noviny that "cautious" rate cuts may start in 1H2024. He noted that headline inflation could return to the +2% Y/Y target around the middle of next year, but monetary easing could commence even before that, when price growth decelerates to around +3.0%-3.5% Y/Y.

• The readout of the interview notes that "even so, according to him, it would be right to raise the rate now, at least symbolically. It may happen that employees will continue to push for higher wages and companies will again compensate for these additional costs by raising prices."
• To the best of our knowledge, this is the first time Holub flags the potential for eventual rate cuts. He is notorious for being the most hawkish Bank Board member and has been vocal about his view that the central bank should increase interest rates further to anchor inflation expectations.