The Central Bank lowers the interest rates by following the orders or recommendations of the government.
But!
Inflation is not decreasing!
Nor does it tend to fall.
At least the Central Bank is raising its inflation forecasts for the end of the year!
However, what was the main thesis of the government on which the proponents relied? They were saying, "For inflation to go down, interest rates have to be low", right?
It was thought so, but it turned out that it was not as it was thought!
Despite the reduction in interest rates, year-end inflation forecasts continue to rise.
What does this chart show us? Of course, this picture shows us that another thesis of the power that the proponents rely on has come to naught.
The result they face does not match their thesis.
Another striking aspect of the matter is the Central Bank Governor's statement that he expects loan interest rates to decrease further over time.
There is an expectation that interest rates will fall even lower, but there is no mention of the expectation that inflation will fall. On the contrary, inflation expectations for the end of the year are being pulled even higher!
What is expected from the government when faced with such a picture? Of course, he is expected to say, “Unfortunately, our thesis was not correct” and apologize.
But there is no such confession and no such apology!
Despite these results, the power that the proponents rely on still insists that their thesis is correct!
They will pass away because of the wrong theses, but they act as if they are unaware of the disaster that will happen to them.
Our humble advice to the proponents is to keep in mind that the power they rely on is not a solid wall!
They are unaware that they will destroy themselves together as the power passes away due to persistence in wrongdoing.
Instead of resisting the wrong, they need to admit their mistakes and look for the right one!
Unless their thesis turns out to be true, they don't have any confidence in themselves.
You know, when interest rates fell, inflation would drop too?