Zielonka (Lewiatan): MPC will cut rates by 50 bps, but not yet

The Monetary Policy Council will cut interest rates by 50 basis points only in June, due to the presidential elections, although in May there are economic premises for cutting rates - assesses the chief economist of the Lewiatan Confederation, Mariusz Zielonka.

Market consensus clearly indicates a 50 bp rate cut by the Monetary Policy Council on Wednesday, May 7.

"In our opinion, and we would like to be wrong, this easing, i.e. the reduction of interest rates, will not take place until June. It must be remembered that 7 members of the Monetary Policy Council were appointed during the rule of the previous coalition. Despite the depoliticization of the Council, it must be remembered that the candidates owe their nomination to political parties. Thus, a potential reduction in interest rates would be grist to the mill of the candidate of the currently ruling party," Zielonka wrote in a commentary.

"If we put aside political games, it would not be difficult to find an economic justification for a rate cut in May. We will gain one month in the event of a tariff war reaching a higher level. We will have an early impact on consumption, which, despite everything, is failing at the beginning of the year. At the same time, inflation has stabilized at around 4 percent and will remain at this level in the near future, at least according to NBP forecasts. They sum up the cut - yes, by 50 basis points, but only after the second round of elections," he added. (PAP Biznes)

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