Publications

If inflation expectations remain well anchored, a pause driven by a supply-driven shock could prove counterproductive given policy lags, potentially leaving the stance tighter than desired once these pressures dissipate.

A sooner resumption of easing would likely require either a more decisive weakening in the labor market or a faster-than-expected easing of tariff-driven goods inflation, potentially reinforced by a swift resolution of the current conflict in Iran.

The Peruvian economy keeps showing a solid performance, supported by the dynamism of private spending. Recently, however, three negative supply shocks have affected it, driving down the output growth forecast for 2026 from 3,1 % to 2,9 %. In 2027, the supply shocks will have dissipated and GDP will grow by 3,1 %.

The global environment faces geopolitical risks and the onset of the Trump 2.0 administration. Although Latin America is no stranger to uncertainty, it has shown resilience. Colombia is recovering amid global and domestic challenges, with persistent inflation that led the central bank to begin a tightening cycle.

We believe it will still have scope to resume gradual rate cuts later this year, as both weak domestic demand and the continued strength of the peso should help contain inflationary pressures going forward.

We expect Banxico to revise up its inflation forecasts. Besides, the forward guidance will likely remain unchanged, thus signaling that March would be too soon to resume the easing cycle.

The FOMC will likely continue to emphasize optionality and data dependence as possible inflationary pressures from tariffs could have been masked thus far by import frontloading and the offsetting cooling of shelter inflation.