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Monetary policy

Monetary policy latest publications

June 23, 2022

Banxico shifts to a steeper tightening pace

Banxico raised the policy rate by 75bp to 7.75% and signaled that another hike of this size was possible at its next meeting, but also that a larger hike was unlikely

June 22, 2022

Banxico will act “more forcefully” and deliver, a widely anticipated, larger 75bp hike

There is (now) a wide consensus that Banxico will match Fed’s expected hikes through December, taking the policy rate to 9.50% by year-end

June 21, 2022

US | Treasury yields likely to increase further

They will peak once the Fed is done tightening. Slowing demand to bring down inflation without significant pain is “not getting any easier”, but markets (still?) price in a soft landing.

June 20, 2022

Europe | Monetary policy normalization pushes up risk premia

The European Central Bank (ECB) has taken a further step in its process of normalizing monetary policy by announcing at its latest meeting that it will end its asset purchase program in July, and that it is prepared to pick up the pace of its rate hikes to contain inflation, in line with other central banks.

June 16, 2022

US | Fed steps up tightening pace and signals a more aggressive approach

The main goal is to avoid long-run inflation expectations de-anchoring; rates will be at a “modestly restrictive level” by year-end.

June 15, 2022

US | A larger 75 bps hike is now likely

We now expect more rate hike front-loading as the FOMC turns more hawkish following persistently high inflation readings from last week.

June 3, 2022

Turkey | CPI surprised on the downside but maintained an increasing trend

Consumer prices increased by 2.98% in May, much lower than market consensus (4%), which resulted in an annual figure of 73.5%. We expect consumer inflation to accelerate above 80% in the coming months before slowing down to near 60% given positive base effects in the last two months of the year.

June 2, 2022

Spain | 2022, year of banking transition

In the Spanish banking system, 2022 will go down in history because several events will occur (or are already unfolding) whose impact on the industry’s results are hard to gauge. Two such events are the war in Ukraine and the end of the grace period for ICO-guaranteed loans.