The statement accompanying the Chilean central bank’s decision to hike its policy rate by 25bp to 3.00% last night was slightly less hawkish than the previous one, and supports our view for fewer rate hikes than the markets are pricing in. We expect rates to rise by 50bp (to 3.50%) by around Q3, and remain unchanged thereafter. The markets expect rates to rise steadily to 3.75% by next year.
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