The US Fed's tightening cycle is unlikely to be a major concern for much of Latin America, although Chile's large current account deficit may become a growing vulnerability. The Fed’s move may also prompt a more hawkish shift by Mexico’s central bank, particularly given the backdrop of growing inflation risks. As a result, we expect a non-consensus 75bp interest rate hike by Banxico next week.
Long Run Outlook Drop-In (23 March, 11:00 EDT/15:00 GMT): What will be the lasting impacts of the war in Ukraine? What legacies will the pandemic leave? What does a future of higher inflation mean for economies and markets? Neil Shearing hosts this special discussion with senior economists about the long-term investing outlook on Wednesday. Register here.
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