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Deutsche Bank Favouring 50BP Cut

CHILE
  • Though volatile items slowed the pace of drops in headline inflation, core declines hold steady. Deutsche Bank’s Taylor Rule shows core-based estimates adjacent to the policy rate for the first time as the measure stabilizes. It suggests continued leeway for monetary easing, as headline and expectations remain well anchored.
  • DB changed their call for the October 26th meeting to a 50bp cut, bringing the policy rate to 9%, as per their latest Week Outlook. They forecast policy rates at 7.75-8% and 5% by the end of 2023 and 2024, respectively.

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