Chile: The balance of risks to inflation is moving toward equilibrium

Research evidence excerpt

Chile: The balance of risks to inflation is moving toward equilibrium

J P M O R G A N Latin America Economic Research

16 June 2026

Chile

The balance of risks to inflation is moving toward

equilibrium

The CBC kept the policy rate unchanged at 4.5%, as expected, with a unanimous Economic and Policy Research

decision, and provided a more constructive scenario when it comes to inflation Diego W. Pereira

convergence to target by the policy horizon, helped by lower crude oil prices. (1-212) 834-4321

diego.w.pereira@jpmorgan.com

The Board now judges that the balance of risks to inflation has been moving toward J.P. Morgan Securities LLC

equilibrium, though it cautions that the macroeconomic outlook remains unusually

uncertain. The Middle East conflict has not been definitively resolved and global

oil supply has not normalized. At the same time, while recent activity has been

weighed down largely by transitory supply-side shocks and the demand outlook

has not materially changed, key drivers of household consumption have softened.

In this context, lower crude prices give the Board room to refocus on weaker-than-

expected activity so far this year. Policymakers reiterated that the future path of the

policy rate will be decided on a meeting-by-meeting basis, even as inflation risks

have eased materially. Attention now turns to the 2Q Monetary Policy Report, due

tomorrow, which should provide further guidance and likely extend the expected

period on hold.

June’s disinflationary whiplash

This year’s inflation path has been shaped by one of the largest fuel-price shocks

in four decades, now rapidly unwinding. The year began with inflation

comfortably below target, only for an external commodity shock to push the 12-

month rate temporarily close to the 4% upper tolerance band.