The BCCh, in its March 2024 IPoM, shifted the central scenario of its policy rate path projection higher. While the terminal remains at 4.00%, it does not reach this level until 2H25, a meaningful delay from its previous estimate of 2H24 and also relative to our expected shift to 1H25. It should be noted that the guidance from the central bank, as well as the policy decisions themselves, have not been very consistent and as such it is difficult to assign a strong conviction to guidance, especially for more distant horizons. In essence, the main changes were hawkish, with higher inflation expectations and slower policy rate cuts.
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