Content and data provided by various third parties and Fidelity - Terms of Use
Print.Print
Small font size A Larger text size A Largest text size A

Deutsche Bank Says Chile's Central Bank Should Hold Rates Tuesday, But Notes Possibility of Cut

BY MT Newswires | ECONOMIC | 12/16/25 10:18 AM EST

10:18 AM EST, 12/16/2025 (MT Newswires) -- Chile's central bank (BCCh) will announce its policy decision at 4 p.m. ET on Tuesday.

According to Deutsche Bank, the persistence of core inflation and the behavior of services inflation prescribe continued caution, while the performance of activity and the labor market affords the BCCh the space to avoid rushing the next cut.

Deutsche Bank expects the BCCh to revise its estimate of the neutral policy rate range towards the top half of the current 3.5% to 4.5% interval.

As a consequence, the bank thinks that it would be more prudent for the BCCh to leave the policy rate steady at 4.75% on Tuesday and resume policy normalization once the expected decline of inflation in early 2026 materializes and the updated structural parameters provide more clarity on the remaining space to complete the normalization process.

Nevertheless, Deutsche Bank recognizes the risks that the BCCh opts to validate the market's expectation of a 25bps reduction. Whether the BCCh determines to deliver the next cut today or in Q1 2026, Deutsche Bank continues to pencil in a terminal rate of 4.25%.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

More Fixed Income News

All Fixed Income News

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

© 1998 – 2014 FMR LLC.

All rights reserved.
fir_news_article