Fynsa
No correction has been observed so far in the equity market, despite technical indicators that the market is overbought and at all-time highs.
January's inflation came in higher than expected, but we must remember that a new basket of goods was introduced to measure inflation, along with a new base year of 2023 = 100, which also incorporated methodological changes and improvements.
The December CPI surprised the market with a 0.5% m/m drop; in this scenario we believe there is room for 100bp cuts or even a 125bp run.
The data indicate that we appear to be reaching the peak of this tightening cycle, as highly restrictive financial and credit conditions will begin to be felt more strongly in activity in the coming quarters.
We can expect a good return on issuers of adequate credit quality.
The market for this fuel, which is key to the economy, is facing constraints.
Any of the last 3 months of core inflation in the U.S. has been the softest reading since September 2021.
According to the Central Bank, the pace of future interest rate cuts is not tied to the magnitude of the first cut, thereby downplaying the urgency of quickly moving to a neutral level
The evolution of inflation facilitates communication in the face of an imminent cut in the central bank's TPM.
