Fynsa
The Bloomberg spot commodity price index—which covers major commodities, including metals, energy, and food—has fallen 10% since the beginning of this year.
Despite the signs of weakness in the economy, we believe that the Central Bank will maintain a more conservative stance: if warranted, it will prefer to cut the rate more aggressively when the time comes, rather than start the cuts earlier and more timidly for fear of making a mistake.
Common sense suggests that we should wait until the end of the rate-hiking cycle before investing again, but keep in mind that time deposits no longer pay what they did a few months ago, and inflation is also falling.
The Central Bank will remain steadfast in its goal of bringing inflation down to its 3% target within two years, and until that happens, it will not begin to lower the monetary policy rate.
In the short term, the good news should continue: for May we expect the CPI to increase 0.2% with respect to April, which would bring the year-on-year variation to 8.8%.
At the last FOMC (Federal Open Market Committee) meeting, they changed the forward guidance of their statement, hinting that there is a good chance that this will be the last rate hike of this cycle.
The Central Bank's constitutional mandate is inflation; therefore, its measures should be aimed at achieving that objective and no other.
Core inflation is leaning in a more comfortable direction, so it would be reasonable to conclude that the Fed could adopt a wait-and-see approach at its next meeting, effectively ending the tightening cycle.
