This article won’t tell you where rates are heading. It will give you something more useful: a list of the things the decision actually rests on, so that you don’t have to rely on impressions from the headlines.
The two things the governor named
1. Core inflation excluding energy
Not the inflation you see in the news. That headline figure includes food, fuel and energy — items whose prices jump around with world markets and have little to do with the domestic economy. Core inflation filters out these swings and shows whether rising prices have spread into the rest of the economy.
2. Its momentum, not the annual figure
This is a detail that hardly anyone explains. The central bank does not track only the year-on-year figure, but also the three-month moving average — in other words, whether price growth is speeding up or slowing down right now. The year-on-year figure is the rear-view mirror; momentum is the view ahead.
And how he sees inflation in general
Michl takes a monetarist view of inflation. In the interview he summed it up in one sentence: “Inflation is always about money, about borrowing and about the amount of money in circulation.” But he said it while explaining what caused the inflation wave of 2022 and 2023: in his view, the money supply doubled in 2017, and that excess money only fed through into prices later.
These two things are worth keeping apart. As the condition for raising rates, he named the two above — core inflation excluding energy and its momentum. The money supply is how he explains the causes, not what triggers a decision.
In practical terms
Next time you hear that “inflation has fallen”, that in itself is not news about interest rates. Ask about core inflation excluding energy, and whether it is speeding up. If it is rising, the risk is not that rates will fall, but that they will go up.
Why cheap petrol is not the central bank’s job
Michl put it bluntly: the central bank is not there to make fuel or energy cheap — and it never will. When diesel goes up, that is no reason to change interest rates. The tool the central bank has at its disposal simply cannot reach world commodity prices.
He also pointed out that budget deficits are inflationary: the bigger the deficit, the greater the pressure on prices — and the less room there is to cut rates.
And what about mortgages? They are driven by something else again
Here is something most articles get wrong. Mortgage rates are not derived directly from the CNB’s base rate. Banks build them mainly on interest rate swaps — that is, on where the market expects rates to be in five or ten years’ time, depending on the length of the fixed-rate period.
That is why the central bank can keep rates unchanged while mortgages become more or less expensive in the meantime. What counts is expectations, not today’s decision. And that is exactly why there is no point timing your mortgage around Bank Board meetings — it has long since been priced in.
Would you like to know what this means for you in particular?
Write to me and I will get back to you. General articles are one thing, your own numbers are another — and we can go through those in a single phone call.
Leave your details +420 725 032 139Source: Aleš Michl, Governor of the Czech National Bank, interview for the Insider podcast, 18 May 2026. The wording is paraphrased, not quoted verbatim.
Marketing communication. This text is for information only; it is not an offer or a personal recommendation and it contains no forecast of future developments. The actual terms always depend on the assessment of the particular bank. Jan Roztočil, Czech business identification number (IČO) 76037061 · tied agent representing a single company, Broker Trust, a.s. · supervised by the Czech National Bank.