Latam Macro Notes: Chile - Inflation expectations: The Tail and a Trigger

Research evidence excerpt

Latam Macro Notes: Chile - Inflation expectations: The Tail and a Trigger

Deutsche Bank

Research

Emerging Markets Date

Latam Macro Notes 18 May 2026

Chile - Inflation expectations: The Tail and a

Sebastian Medina Trigger

LatAm Economist

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Francisco Campos

Introduction Chief LatAm Economist

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Since the start of the Middle East war, BCCh has reiterated its commitment to the

3% inflation target at the policy-relevant 2-year horizon. Its reaction function has Beatriz Garcia Nunes

accordingly centered on three risks: second-round effects, higher persistence, +1-212-250-9584

and the anchoring of inflation expectations. The latest CPI print showed limited

pass-through so far beyond energy (see here), whereas assessing higher

persistence will take some months, shifting the focus to the expectations channel.

Does looking beyond the median inflation expectation add information about the

degree of anchoring? Do inflation surprises drive forecast revisions at the relevant

horizon?

We find that the 90th percentile of the inflation distribution in the BCCh's

Economists' Expectations Survey has led the median in each of the three un-

anchoring episodes since 2005 — by roughly three months and at 12bps for every

1pp move — and that pass-through of CPI surprises into the 2-year median is

muted on average but asymmetric, with upside surprises lifting the median by

~20bps, while downside prints have produced no significant response. Both

dynamics are worth monitoring: the 90th has already drifted from 3.0 in March to

3.3 in May, and a hot CPI print could trigger upward revisions at the 2-year

horizon, increasing the likelihood of interest rate hikes to anchor expectations.

Beyond the median