After more dovish readings in the COPOM statement, the Central Bank reaffirms a tough stance and reinforces its commitment to anchoring inflation expectations (02/07)
In the document, the Committee sought to dispel concerns about a sharper-than-expected slowdown in economic activity while explicitly expressing discomfort with the further unanchoring of inflation expectations. The committee’s inflation model, which incorporates the Focus survey’s Selic forecasts (15%), already signals that the current level is insufficient to bring inflation toward the target. Thus, we have revised our terminal rate expectation from 15% to 15.50%, incorporating hikes of 100, 75, and 50 bps in the March, May, and June meetings, respectively.
In the United States, Trump implements tariffs, but the market welcomes a retreat toward negotiations. On Friday, rumors surfaced regarding possible tariffs on other countries. Initial sources suggested the implementation of reciprocal tariffs to match those imposed on the U.S. by other nations.
U.S. labor market: Job creation falls short of expectations in January, impacted by seasonal factors. Concerns over the U.S. labor market and potential inflationary pressures in the services sector persist and should remain on the radar of monetary policy decisions in the coming months.
For more information, please check our Weekly Report 99
