MNI CNB Review - Nov 2024: Another 25bp Cut, More Hawkish Talk
Executive Summary:
- The Bank Board trimmed the two-week repo rate by 25bp.
- One dissenter voted for a 50bp cut and one voted for a pause.
- The forecast showed a higher inflation path and a lower rate path.
Click here to see the full review: MNI CNB Review - November 2024.pdf
The Czech National Bank (CNB) lowered the two-week repo rate by 25bp, bringing it to 4.00%, as expected by most analysts. There were two dissenting votes, in both directions, with one policymaker seeking a pause in the rate-cutting cycle and one calling for a larger cut. Although the decision was accompanied by a macroeconomic forecast showing a lower implied interest-rate path, Governor Aleš Michl doubled down on his hawkish message. The Board used the statement to warn of the anticipated temporary rise in inflation and pointed to the still elevated core inflation, noting that this may result in a pause to the process of loosening monetary policy, even as interest rates remain at restrictive levels.