Nora Szentivanyi is joined by CE-3 chief economist Jose Cerveira to discuss inflation developments in EM and the scope for central banks to cut rates in a more challenging global environment of higher US rates and a stronger dollar. Core inflation has fallen sharply, in some cases even faster than expected, bringing run rates close to central bank targets. But the disinflation trend appears overly reliant on core goods and the risk is that weaker EM currencies will now push inflation higher again, particularly in the countries ...
Nora Szentivanyi is joined by CE-3 chief economist Jose Cerveira to discuss inflation developments in EM and the scope for central banks to cut rates in a more challenging global environment of higher US rates and a stronger dollar. Core inflation has fallen sharply, in some cases even faster than expected, bringing run rates close to central bank targets. But the disinflation trend appears overly reliant on core goods and the risk is that weaker EM currencies will now push inflation higher again, particularly in the countries where labor markets remain tight and/or fiscal policies turn more expansionary. Thus, while there is still space for EM central banks––especially those with high real rates and ample FX buffers ––to cut rates, it is only natural that they will be more cautious.
This podcast was recorded on October 17, 2023.
This communication is provided for information purposes only. Institutional clients can view the related reports at
https://www.jpmm.com/research/content/GPS-4482187-0
https://www.jpmm.com/research/content/GPS-4526698-0
https://www.jpmm.com/research/content/GPS-4522745-0
https://www.jpmm.com/research/content/GPS-4534175-0
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