Global Data Pod Research Rap: LatAm easing cycles: how low can you go?

Latin America economists Cassiana Fernandez, Gabriel Lozano and Diego Pereira join Nora Szentivanyi to discuss the region’s easing cycles that kicked off with bolder-than-expected rate cuts. While risks of more front-loaded easing, especially in Brazil, have risen, there are important divergence across the region. Mexico’s business cycle and policy response vis-à-vis other major LatAm countries in particular remains striking and overheating concerns point to renewed risks of a later start of the easing cycle. In all, despite significant disinflation and rate cuts priced in by markets, we see LatAm’s monetary policy stances remaining restrictive through next year. Much will depend on the sustainability of the disinflation process, fiscal policy responses to the economic slowdown as well as global developments.

This podcast was recorded on 8 August 2023.

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