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June 17, 2019

The Fed: review of its monetary policy strategy, tools and communication practices

Just under a year ago, the Federal Reserve (Fed) began a process to review its monetary policy strategy, tools and communication practices.
  • Geography Tags
  • USA

April 18, 2019

Peru | What will the Central Bank do with its policy rate in the coming months?

We estimated a Taylor rule for the Central Bank and found that the estimated rate has not diverted from the average observed rate more than one month. We expected that the BCRP would soon begin to raise the rate to a more neutral level. However, there are concerns about global growth which could lead to the current monetary…
  • Geography Tags
  • Peru

November 13, 2018

Banxico to hike 25bp to 8.00% with higher uncertainty and risks

Our call is based on MPC’s hawkish forward guidance and the materialization of some risks, especially a weaker MXN. A lot has changed in the intermeeting period and in our view a hike is warranted. We are not expecting an additional hike in December for now, but will depend on the MXN performance which will most likely be d…

November 9, 2018

Mexico | Trouble brewing on the fiscal front

The people working on the fiscal budget for next year - which has to be approved before 15 December - are presumably redoing the calculations using new assumptions for the main macroeconomic variables, the outlook for which has changed with the decision to cancel the Texcoco airport project.

October 19, 2018

Banco de México: the right decision

Last week saw the publication of the minutes of the Banxico Governing Board's latest monetary policy meeting. As we already knew, it was decided to leave the monetary policy rate unchanged at 7.75%, in a split vote in which four members voted in favour of no change and one voted to increase the rate by 25 bp. In my view, th…

April 24, 2018

U.S. | Long-term yields edge up yet fundamentals remain unchanged

Long-term yields have moved up as the 10-year Treasury yield is expected to cross the 3.0% threshold – a level not seen since January 2014. The climb in long-term yields is backed by an increase in inflation expectations.
  • Geography Tags
  • USA

April 9, 2018

Mexico | Disinflation pressures are taking hold

Inflation fell sharply in the first three months of the year as we expected. Inflation set to fall further; Banxico will most likely keep rates unchanged on Thursday.

March 22, 2018

FOMC Meeting March 20th-21st

FOMC: Powell, an Advocate for Optimism. As we expected, the FOMC increased the Fed funds rate to 1.5%-1.75%, confirming that newly appointed Chairman is committed to maintaining continuity with his predecessor.
  • Geography Tags
  • USA