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Pantheon See Easing Pressures Allowing For Rate Cuts this Month

CHILE
  • They write that the m/m drop — in stark contrast to the 0.9% gain a year ago — was explained by falls in seven of the 12 components, particularly clothing, transportation/fuel prices, furnishings and household equipment prices, and recreation and culture.
  • They see both headline and core inflation as falling rapidly, due mainly to the lagged effect of tight financial conditions, the CLP rebound in recent months, and the weakness of the economy.
  • They still believe that risks are tilted to the downside, suggesting that the BCCh will start to cut interest rates this month, particularly now that economic activity is under severe stress.

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