{"id":1956975,"date":"2023-06-26T08:00:02","date_gmt":"2023-06-26T12:00:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/analysis-latin-america-after-record-tightening-could-lead-way-on-rate-cuts\/"},"modified":"2023-06-26T08:02:27","modified_gmt":"2023-06-26T12:02:27","slug":"analysis-latin-america-after-record-tightening-could-lead-way-on-rate-cuts","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/analysis-latin-america-after-record-tightening-could-lead-way-on-rate-cuts\/","title":{"rendered":"Latin America, having experienced significant tightening, may pave the way for rate cuts."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">26<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fanalysis-latin-america-after-record-tightening-could-lead-way-on-rate-cuts%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1956975&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"entry-content\">\n<p><strong>Latin America&#8217;s Central Banks Poised to Lead the World in Interest Rate Cuts<\/strong><\/p>\n<p>By Marion Giraldo<\/p>\n<p>MEXICO CITY (Reuters) \u2013 Latin America\u2019s major central banks, which have led some of the most aggressive tightening over the last two years, may now be poised to lead the world on <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/analysis-latin-america-after-record-tightening-could-lead-way-on-rate-cuts\/\" title=\"Latin America, having experienced significant tightening, may pave the way for rate cuts.\">interest rate cutting amid clear signs<\/a> of slowing inflation in places like Chile and Brazil.<\/p>\n<div id=\"div-gpt-ad-1663871513696-art-1\" style=\"min-width: 320px; min-height: 50px;  text-align: center;\">  \t<script>  \t\tgoogletag.cmd.push(function() { googletag.display('div-gpt-ad-1663871513696-art-1'); });  \t<\/script>  <\/div>\n<div class=\"ad-slot__ad-label\">Advertisement<\/div>\n<\/p>\n<p>The potential key inflection point comes even as the U.S. Federal Reserve and the European Central Bank both signal further <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/federal-reserve-chair-no-interest-rate-hikes-until-inflation-spike\/\" title=\"Federal Reserve Chair: No interest rate hikes until inflation spike\">interest rate hikes<\/a> may be on the horizon, and the Bank of England surprised many investors by hiking interest rates half a percentage point last week.<\/p>\n<p>Latin America embarked in early 2021 on one of the world\u2019s sharpest monetary tightening cycles to contain runaway inflation fueled by bottlenecks in the global\u00a0production chain, rising food prices, and the spillover effects of fiscal stimulus measures used to ease the economic pain of the COVID-19 pandemic.<\/p>\n<p>That\u2019s meant rates are already sky-high \u2013 11.25% in Chile and Mexico, and13.75% in Brazil \u2013 with more room to cut.<\/p>\n<p>\u201cWe expect Latin American central banks to be the first to cut rates globally because there are various domestic dynamics that have benefited the region,\u201d said Joan Domene, senior economist at Oxford Economics, citing better-than-expected economic activity and slowing inflation.<\/p>\n<p>Goldman Sachs analyst Alberto Ramos wrote in a June note that the region was seeing \u201cgradual but steady and broadening\u201d progress on inflation, including core prices, that could signal a \u201cpolicy pivot ahead,\u201d albeit with caution.<\/p>\n<p>\u201cCentral banks will be looking for signs of disinflation consolidation and macro rebalancing before starting to credibly reduce the level of monetary policy restrictiveness,\u201d he said.<\/p>\n<p>The small South American country of Uruguay has already cut rates, by 25 basis points in April. Chile is seen easing as soon as next month, with Brazil potentially following close behind.<\/p>\n<p>Chile\u2019s central bank kept its <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wall-street-slides-sp-500-posts-worst-month-quarter-since-covid-19-outbreak\/\" title=\"Wall Street Slides, S&#038;P 500 Posts Worst Month, Quarter Since COVID-19 Outbreak\">key interest rate<\/a> on hold at 11.25% last week, but said if recent positive trends continue,\u00a0it could begin cutting the rate in the short term.<\/p>\n<p>Forecasts are pointing to a rate cut next month, said Cesar Guzman, macroeconomic analyst at Santiago-based Grupo Securities.<\/p>\n<p>\u201cThe market has already priced in the expectation of a 100-basis-point cut,\u201d he said.<\/p>\n<p>In regional powerhouse Brazil, the central bank held rates steady last Wednesday for a seventh straight time, though it took a more dovish tone on future steps by excluding the possibility of upcoming rate hikes from its policy statement.<\/p>\n<p>Brazilian financial markets showed many traders are betting the bank will kick off a cycle of monetary easing in August, as President Luiz Inacio Lula da Silva again called on the monetary authority to cut rates to spur growth.<\/p>\n<p>MEXICO AND COLOMBIA STILL WAITING<\/p>\n<p>Mexico looks further behind. Its central bank kept the rate steady last week for a second straight meeting, signaling it will hold the rate \u201cfor an extended period\u201d despite consumer price inflation at its lowest in more than two years.<\/p>\n<p>\u201cThis, alongside hawkish noises from the Fed mean that Banxico is unlikely to shift towards rate cuts until the turn of the year,\u201d said Kimberley Sperrfechter, Latin America economist at Capital Economics.<\/p>\n<p>Peru\u2019s central bank, however, which has kept its <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/key-inflation-gauge-posts-fastest-annual-price-gain-in-30-years\/\" title=\"Key Inflation Gauge Posts Fastest Annual Price Gain In 30 Years\">benchmark interest rate<\/a> at 7.75% for five consecutive meetings, is seen likely cutting rates in August, according to analysts.<\/p>\n<p>The region\u2019s distant outlier is Argentina, which only last month hiked its benchmark interest rate by 600 basis points to an astonishing 97% as the South American country battles inflation running at 114% on an annual basis. Even there, however, the central bank opted to hold rates steady in June as monthly inflation slowed for the first time in half a year.<\/p>\n<p>\u00a0\u00a0\u00a0In Colombia, the central bank\u2019s board is expected to hold the interest rate steady at 13.25% at its next meeting this week on the back of a better inflation outlook, ending nearly two years of rate rises aimed at containing rising consumer prices.<\/p>\n<p>\u201cEveryone is expecting that the previous rate hike was the last one, and it was a split decision,\u201d said Andres Pardo, at XP Investments. \u201cColombia and Mexico will be the last ones to cut rates, possibly in the fourth quarter.\u201d<\/p>\n<\/p>\n<p> (Reporting by Marion Giraldo; Additional reporting by Natalia Ramos and Fabian Cambero in Santiago and Nelson Bocanegra in Bogota; Writing by Anthony Esposito; Editing by Jonathan Oatis)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/uncategorized\/analysis-latin-america-after-record\/attachment\/file-photo-a-man-walks-in-front-of-the-central\/\"><\/a><\/p>\n<p><a href=\"https:\/\/www.oann.com\/uncategorized\/analysis-latin-america-after-record\/attachment\/file-photo-people-walk-in-front-the-central-bank-headquarters\/\"><\/a><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>Obama&#8217;s Controversial Comments on India<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>Week in Review: Major Headlines<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>Search for Missing Sub Ends<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>New GOP Candidates Enter 2024 Presidential Election<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>Aston Martin Strikes Deal with U.S. EV Maker<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>Japan Boosts Efforts to Strengthen Chip Industry<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>Alphabet&#8217;s Failed Attempt to Bring Internet to Remote Areas<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>Berkshire Hathaway Sells Shares of Electric Vehicle Company<\/strong><\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Latin America&#8217;s central banks, known for their aggressive tightening, may now take the lead in interest rate cuts as inflation slows in countries like Chile and Brazil. This shift could have a significant impact on the region&#8217;s economy.<\/p>\n","protected":false},"author":66,"featured_media":1956976,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[542],"tags":[],"class_list":["post-1956975","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-oann"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1956975","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1956975"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1956975\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1956976"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1956975"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1956975"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1956975"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}