Governor Says That Rate-Hike Cycle Is Not Over

Governor Adam Glapinski says that the NBP is not formally ending its rate-hike cycle and would not hesitate to raise interest rates if an unexpected shock threatens to derail ongoing disinflation. He adds that if inflation falls below +10% Y/Y in line with projections, then the MPC would review staff advice; if it concludes that inflation will certainly keep falling over the following quarters towards the official target, it could discuss cutting interest rates. However, he refuses to speculate on the specific timing of the first rate cut.

• Glapinski says that inflation expectations are falling quickly among both consumers and producers. He says that this could limit the "greedflation" dynamic, whereby sellers disproportionally increase their profit margins, taking advantage of elevated inflation expectations. Glapinski says that consumers are now becoming less ready to accept further price hikes.