After a rapid rebound from last year’s recession, it seems that growth in Latin America is now starting to ease to a more sustainable pace. Monetary tightening has further to run in Chile and Peru, where interest rates are still below their neutral level. But having got ahead of the curve in recent months, we expect policymakers in Brazil to pause until year-end, while rate hikes remain off the agenda in Colombia and Mexico. More generally, if the global economy cools next year, as we expect, expectations that interest rates could soon return to their pre-crisis levels in some countries are likely to be dashed. We therefore remain bullish on the prospects for local currency bonds.