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© Reuters. FILE PHOTO: A security worker guards an entry of the Chilean Central Bank building in downtown Santiago, Chile July 7, 2022. REUTERS/Ivan Alvarado   JPM +4.10% Add to/Remove from Watchlist Add to Watchlist Add Position Position added successfully to:

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Data this week showed Chile’s inflation slowed in October to its lowest level in eight months.

The Wall Street bank said markets are discounting interest rate cuts to begin in January, when the only monetary policy meeting in the first quarter of next year will take place.

“Yet, we attach more probability to the easing cycle starting in (the second quarter),” the note said.

“For the easing cycle to start in January, we would need either a more disinflationary core inflation path, and/or a more abrupt deceleration in global and domestic economic activity than what we currently forecast in our central scenario.”

Graphic: Chile: inflation slows https://graphics.reuters.com/CHILE-ECONOMY/xmpjkgmkyvr/chart.png

The bank’s base case sees the benchmark rate being cut in April by 75 basis points to 10.5%.

“The nominal policy rate is thus expected at 9.5%, 8.50% and 7% by June, September and December 2023, respectively.”

Chile is expected to keep its benchmark interest rate at 11.25% in its December meeting according to a central bank poll of analysts.