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HSBC Expect BCCh To Cut By 50bp Next Week

CHILE
  • HSBC expect BCCh to cut its monetary policy rate by 50bp to 6.0% at the 23 May meeting, in line with consensus expectations. This will imply a new reduction in the pace of policy easing, following the 75bp cut in April.
  • They think recent data leave little room for a dovish turn by the Board. Economic activity has been stronger than expected, while inflation surprised to the upside again in April. They forecast 2.0% GDP growth in 2024, but with an upside risk, while inflation hovers around the ceiling of the 2% to 4% target range for the remainder of 2024.
  • HSBC forecast another 50bp cut in June and 25bp cuts in July and September, with a pause at 5.0% thereafter. The level of the neutral policy rate will then become relevant to assess future policy decisions. The last estimate in December had a median of 1.1%. HSBC think that the next update will result in a higher neutral level, particularly given external conditions.
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  • HSBC expect BCCh to cut its monetary policy rate by 50bp to 6.0% at the 23 May meeting, in line with consensus expectations. This will imply a new reduction in the pace of policy easing, following the 75bp cut in April.
  • They think recent data leave little room for a dovish turn by the Board. Economic activity has been stronger than expected, while inflation surprised to the upside again in April. They forecast 2.0% GDP growth in 2024, but with an upside risk, while inflation hovers around the ceiling of the 2% to 4% target range for the remainder of 2024.
  • HSBC forecast another 50bp cut in June and 25bp cuts in July and September, with a pause at 5.0% thereafter. The level of the neutral policy rate will then become relevant to assess future policy decisions. The last estimate in December had a median of 1.1%. HSBC think that the next update will result in a higher neutral level, particularly given external conditions.