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Goldman Sachs on BCCh: Modal Call For 200BP Hike

CHILE

Goldman Sachs: Modal Call For 200BP Hike, 40% Probability of Smaller 150BP Increase

  • In its guidance, the central bank has maintained a hawkish tone and in their view risks for inflation remain significant and their materialization is particularly relevant in a context in which current and prospective inflation are already high.
  • Given the high inflation prints since the January meeting, the rise in commodity prices, particularly oil, the deterioration of inflation expectations, and a more hawkish FOMC, GS believe it will be a close call between a 150bp and 200bp hike.
  • Their modal call is for a 200bp hike, with the MPC driving its policy rate to 7.50%. However, GS assign a 40% probability to the 150bp hike justified by a strategic decision that would allow the MPC to assess the magnitude of the economy's slowdown and for the resolution of some of the uncertainty related to the conflict in Ukraine. All in all, GS expect the MPC to drive the policy rate further up in 2022, to 8.50%.
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