Chile’s economic activity remained flat in April, stoking bets that the central bank will start to lower the benchmark interest rate from an over two-decade high as early as July. Swap rates tumbled. The Imacec index, a proxy for gross domestic product, was unchanged on the month, below the 0.1% median estimate of analysts in a Bloomberg survey. From a year prior, it decreased 1.1%, the central bank reported on Thursday. Chile’s central bank has stuck to its hawkish stance, emphasizing that headline and core inflation remain well above its 3% target even as the economy stagnates. Policymakers have said they see no evidence that the slowdown in inflation has been consolidated. Still, traders surveyed by the monetary authority see an easing cycle starting in July.
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