With adverse external conditions, the exchange rate will be more depreciated, and the Selic rate will be higher in 2024. – 04/12
With worse consumer inflation data in the United States, the FED is expected to be even more cautious. Considering this scenario, we revised our expectation of cuts in Fed Funds from three to two declines this year, with the cycle starting in September and another cut in December.
For the domestic environment, the implications of this situation are expected to occur through the exchange rate channel. Thus, we revised our expectation from R$4.90 to R$5.10. Regarding monetary policy, we expect the pace to be reduced to 0.25 pp already in June, with the rate ending the year at 9.25%. For domestic inflation, we maintain our scenario of 3.6% for 2024 and 3.4% for 2025.
For more information, please check our Weekly Report 59.
