Fynsa
The January monetary policy meeting opened a chapter in the search for economic stability in a challenging global and local context.
It appears that the trend is rebounding and the market is ready to inject the liquidity it had been holding onto while waiting for better investment opportunities.
The evolution of inflation facilitates communication in the face of an imminent cut in the central bank's TPM.
What the figures show us is that the Chilean economy is stagnant.
Banks cite a less favorable or more uncertain economic outlook, reduced risk tolerance, deteriorating collateral values, and concerns about funding costs and their liquidity positions.
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.
Of concern is what is happening with core inflation, which rose 1.6% in March.
Our biggest question mark is that a soft landing scenario is already largely built into prices and we don't see much reason for risk assets to continue to rise, amid higher rates and still hawkish language from several FOMC members.
