Hungary’s MPC could still turn to rate cuts

The Hungarian MPC seemed to pour cold water on the prospect of additional monetary policy easing in the statement accompanying today’s rate-setting meeting. However, we think the Council is still too optimistic about the economy’s growth prospects as well as the impact of its own unconventional tweaks to its toolkit on overall monetary conditions. As a result, we still think there’s a good chance of an interest rate cut in the coming months.