Forward-looking real policy stance returns to its previous range after April's compression
Recent dynamics
Chile's ex-ante real policy rate was comparatively stable through 2025. It began the year at 1.20 pp, moved mostly between 1.40 pp and 1.60 pp from February onward, and finished December at 1.50 pp. The narrow range pointed to a relatively steady forward-looking real policy setting despite month-to-month movements in its underlying components.
That stability initially carried into 2026. The derived rate held at 1.50 pp in January, February and March before dropping abruptly to 0.50 pp in April. The one-month decline of 1.00 percentage point was the clearest break in the series shown, temporarily compressing the forward-looking real policy spread far below its prevailing range.
The compression proved short-lived. The rate recovered to 1.20 pp in May, 1.40 pp in June and 1.50 pp in July. By July, the entire April decline had effectively been reversed and the measure had returned to the same level observed during the first three months of 2026.
August brought a modest pullback to 1.40 pp. The latest reading is 0.10 percentage point below July and 0.15 percentage point below August 2025, but remains 0.90 percentage point above the April trough. At 1.40 pp, the series is once again close to the range that characterized most of 2025 rather than signaling a continuation of April's unusually compressed stance.
Interpretation and economic signal
The ex-ante real policy rate provides a forward-looking measure of the real monetary-policy setting by comparing the nominal policy rate with the expected-inflation measure embedded in the EconoAtlas calculation. Unlike the ex-post measure, it is not driven by realized inflation alone and therefore better reflects the real rate implied by prevailing inflation expectations.
The stability around 1.4–1.6 pp during most of the sample is therefore economically informative. It suggests that movements in the nominal policy rate and expected inflation generally offset one another sufficiently to keep the forward-looking real spread within a relatively narrow band.
April 2026 stands out as the main regime interruption. Because this indicator is a derived spread, the decline to 0.50 pp should not be attributed automatically to a single cause. It could reflect a lower nominal policy rate, higher inflation expectations, or a combination of the two. Identifying the driver requires reading the derived metric together with its underlying policy-rate and expectations series.
The rapid recovery after April is equally important. By July, the forward-looking real rate had returned to 1.50 pp, implying that the compression was not persistent. August's move back to 1.40 pp is modest by comparison and leaves the measure close to its broader historical range rather than establishing a new easing phase.
A positive ex-ante real rate does not, by itself, prove that monetary policy is restrictive in an absolute macroeconomic sense. That judgment would require comparison with Chile's neutral real interest rate. The most defensible signal from this series is therefore relative: the forward-looking real stance has normalized after a temporary compression and currently sits slightly below its level one year earlier.
Conclusion
Chile's ex-ante real policy rate stood at 1.40 pp in August 2026, down 0.10 percentage point from July and 0.15 percentage point from August 2025.
The broader pattern is one of stability interrupted by a sharp but temporary compression. After holding near 1.50 pp through the first quarter, the rate fell to 0.50 pp in April and then recovered almost completely over the following three months.
The current signal is therefore one of normalization rather than renewed tightening or sustained easing. The forward-looking real policy stance has returned close to the range seen through most of 2025, while the small August decline suggests only a mild softening at the margin.