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JPM Raised Its Terminal Rate Forecast to 7%

CZECHIA
  • JPM expects a 75bp rate hike in June, followed by another 50bps in August.
  • The nomination of a new Governor, and potential reshuffling of the board adds uncertainty to this outlook and were it not for it, JPM probably would revise the terminal rate even higher.
  • President Zeman will announce the new Governor tomorrow, and local media suggest Ales Michl is the front runner.
  • As Michl opposed every single rate hike in this cycle there is a prospect of a dovish shift, especially if board members Benda and Nidetzky’ terms are not renewed, and they are replaced with people more like-minded to Michl.

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