Week Ahead in Latin America: LatAm monetary policy: what if the Fed hikes?

Research evidence excerpt

Week Ahead in Latin America: LatAm monetary policy: what if the Fed hikes?

Idea

June 12, 2026 08:43 AM GMT

Morgan Stanley C.T.V.M. S.A.+MWeek Ahead in Latin America | Latin America Fernando D Sedano

Chief LatAm Ex-Brazil Economist

LatAm monetary policy: what if Fernando.Sedano@morganstanley.comAna Madeira +55 11 3048-6605

Economist

Ana.Madeira@morganstanley.com +55 11 3048-9582

the Fed hikes? Morgan Stanley & Co. LLC

Seth B Carpenter

This week, we focus on how we expect central banks in LatAm Chief Global Economist

Seth.Carpenter@morganstanley.com +1 212 761-0370

to react to a Fed-hiking scenario. Next week, focus on monetary

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policy meetings for Brazil and Chile; and Mexico's 1Q26 GDP. Thiago A. Machado, CFA

LatAm in focus… Although our US Exhibit 1: A Fed-hiking scenario Thiago.Machado@morganstanley.com +55 11 3048-6249

colleagues do not expect further Fed hikes would imply different central bank

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in their baseline, markets have responses in LatAm Nicolas Eterovic

increasingly moved to price additional Monetary2026E policy2027Erate Base caseCentral bankFed-hikingbias scenario EconomistNicolas.Eterovic@morganstanley.com +1 212 761-1245

tightening. In this note, we discuss how BrazilMexico 14.00%6.50% 11.00%6.50% On hold/On holdDovish OnOn holdhold

Chile 4.50% 4.50% On hold On hold/ Hawkish Morgan Stanley C.T.V.M. S.A.+

Colombia 13.75% 13.75% On hold/ Hawkish HawkishLatin American central banks would

Peru 4.25% 4.25% On hold Hawkish Julia Lobato Barbosa

likely react under such a scenario. Our Source: Morgan Stanley LatAm Economics Economist

view is that domestic conditions would Julia.Lobato.Barbosa@morganstanley.com +55 11 3048-6016

continue to dominate monetary policy decisions across the region.