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JPMorgan Say May Economic Activity Reinforces September Easing Call

PERU
  • JPMorgan have noted that the recent activity underperformance reinforces their base case for the central bank to start trimming the policy rate as soon as September.
  • The Board continues to play with caution, and found it suboptimal to even signal potential room to start easing the monetary policy in the near term. But following May’s print, JPM maintain their call for a first cut in September (-25bp).
  • If July CPI is not contaminated by supply disruptions linked to El Niño, and inflation expectations continue to trend lower, the risk is for a 50bp cut rather than the current 25bp JPM have as baseline.

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