J.P. Morgan Maintains 50bps Worth Of Rate Cuts For Q4, But Sees Risks Of Earlier Move

The US bank maintains its view of rate cuts in H2 2024 for the BSP, but sees risks of an earlier start (in August), rather than Q4. This update comes post Friday's weaker than expected CPI data. See below.

J.P. Morgan: "Accelerated return to target range; maintain 50bp rate cut forecast for 4Q24 with risk of August move – Given subdued underlying price pressures and the significant disinflationary impulse of the rice tariff cut, we think that headline CPI has already returned to the 2%-4% target range sustainably (Figure 5). From an ex-ante real policy rate standpoint, the BSP has leeway to ease but we think they will err on the side of caution and monitor external conditions through the summer before delivering 50bp of rate cuts in 4Q24 (starting October). The risk is skewed towards an earlier move in August, in our view."