Glapinski Flags Potential For 25bp Rate Cut In September

NBP Governor Adam Glapinski says that the Monetary Policy Council could reduce interest rates by 25bp as soon as in September if inflation eases to single-digit territory, while projections show "with 90% probability" that it is clearly headed towards the target range.

• Glapinski pushes back against current rate-cut pricing, noting that bets implying 100bp worth of cuts this year are excessive. He says that the NBP is a conservative and prudent central bank and won't make any rapid moves.
• The Governor expects any rate cuts to be delivered in 25bp increments, unless he is outvoted by other MPC members. He says that cuts by the year-end are already priced in, but the 100bp priced by the market now is a "fantasy" - and should be ruled out.
• Glapinski says that cutting interest rates by the year-end would merely constitute acting on what is already priced in by the market. He says that the central bank does not want to catch the market off guard.