Inflation latest publications
The course begins with the hope that the worst of the pandemic and the greatest economic impacts are behind us. The combination of unprecedented monetary and fiscal stimuli has been key to softening the impact of the crisis. With the emergency behind us, central banks are reviewing their strategies.
Lima's Consumer Price Index fell 0.11% m/m in August, in line with our expectations and the market (Bloomberg Consensus: -0.08% m/m), the second lowest figure so far this year. With this result, year-on-year inflation decreased to 1.7%, compared to 1.9% the previous month.
The Fed released its updated Statement on Longer-Run Goals and Monetary Policy Strategy, which reflect changes in the economy over the past decade and explains how policymakers are planning to conduct monetary policy. The statement also enhances transparency, accountability and effectiveness of monetary policy.
Banco de México should not react to recent increases in inflation. In the absence of structural inflationary pressures, the central bank should continue to relax monetary policy.
U.S. Recovery: To V, or not to be. Fed contemplates their next move. The return of the yield curve targeting. Tracing the impact of CARES Act’s relief payments towards the Covid-19 crisis recovery.
The Central Bank kept in August the policy rate at 0,25%, renewed its commitment to maintain a very ease stance for a prolonged period of time, and underlined its efforts to provide liquidity to the market.
A notably dovish tone alongside a widening negative output gap backdrop points to further cuts in line with our view. • Banxico strikes again a remarkably and warranted dovish tone.
We are sticking with 50bp cuts in the policy rate in each of the 2020 remaining scheduled meetings (to 3.00%). Forward guidance is unlikely but we expect Banxico to remain dovish and to brush aside the recent temporary and supply-driven inflation increase.