February 06, 2023 15:50 GMT
Itaú Do Not Discard Signal To End Cycle At This Meeting
- Itaú expect headline and core inflation at 0.63% mom and 0.65% respectively. They expect headline inflation will likely reflect pressure from core food and services CPI (reflecting price updates mainly in housing and restaurants in 1H Jan). Pressure on the non-core CPI will likely come from a seasonal adjustment in government regulated tariffs.
- Assuming their forecast is correct, headline inflation would stand at 7.86% in January (from 7.82% in December), while core inflation would increase slightly to 8.39% (from 8.35%).
- Itaú expect a 25-bp hike (from 50-bp), reaching a level of 10.75%. They think the end of the hiking cycle is near and don’t discard the central bank signalling an end to the hiking cycle in this meeting given the recent dovish tone of the Fed.