Czech Banking Association's Chief Economist Expects 50bp Cut From CNB Next Week

Hospodarske Noviny published an op-ed by Jakub Seidler, Chief Economist of the Czech Banking Association, who writes that the CNB may cut rates by 50bp next week:

• Seidler notes that "after the December meeting, it seemed likely that the central bank would again choose a cautious approach at its upcoming meeting (...) however, it currently appears that central bankers could cut rates by as much as half a percentage point".
• He cites growing conviction that inflation will drop in January and may soon end up below the +3.0% Y/Y upper end of the CNB's target band, which is reportedly suggested by various advance indicators of price dynamics.
• Seidler argues that "a slightly faster cut at the February meeting will not be a mistake, even if in the end the January inflation figure is not as low as the optimistic estimates suggest". He notes that a 50bp cut has already been priced by the market, which could provide another argument for the Bank Board next week.
• Click here to see the full piece.