Why the CNB should cut interest rates further in March (even though it probably won’t)

February year-on-year inflation at 2.7%. A recorded or expected fall in business confidence in a number of advanced economies. The American economy in the midst of a transformation into a “gangsteronomy” that uses tariffs as a means of pressure on adversaries and recent allies alike. Stock markets in a correction phase. Greenland “ending up one way or another” under the Stars and Stripes. The break-up of existing alliances and the repudiation of existing trade agreements and rules. Amid a flood of news of this kind, the setting of monetary policy in one small open European economy may seem rather unimportant, but let us nonetheless try to list the reasons why the Czech National Bank should decide on a further cut in interest rates on 26 March. We note in advance that the market largely does not expect such a decision, so a rate cut would come as a surprise to it. Read more in our article.