A razor-thin split in expectations
A Bloomberg poll finds a narrow edge for a hold at 12.25% on Oct. 30, with 17 economists calling for no change and 14 looking for a 25 basis point increase. That near tie makes this one of the tightest calls in months, and keeping rates steady would leave borrowing costs at their highest since 2024.
The board itself has been divided. At the previous meeting, five of seven members backed another increase, though not the same size. Among them, four backed a quarter-point increase - one of whom was Finance Minister Miguel Gómez - and one favored a half-point hike. The remaining two voted to keep rates unchanged.
Why policy has tightened
So far this year, policy rates have climbed by three percentage points as inflation accelerated, aided by a sharp minimum wage increase and a deteriorating fiscal outlook. Price gains ran at 6.29% in September, and the bank's forecasts show inflation staying above the top of the target range through 2027, which would extend the current streak of overshoots to seven straight years.
Growth, however, is cooling. Overall activity slipped slightly in August, the first monthly decline since April 2025, and both manufacturing and retail sales came in weaker than expected.
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What this means for your portfolio
Bloomberg Economics sees inflation still high and momentum weakening, with tight financial conditions reducing the need for another hike, but also flagging that the mix of inflation, fiscal and external risks leaves scant space to cut. Central bank co-director Mauricio Villamizar said this month in Thailand that further increases in rates might be necessary and that borrowing costs may have to remain elevated for longer to contain rising inflation risks, pointing to El Niño and the war in Iran, along with a widening fiscal deficit.
The bottom line: higher for longer is very much in play. That can lean on growth-sensitive stocks while keeping the spotlight on interest-sensitive assets in your portfolio.
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