The minutes reaffirm the message of the previous statement, confirming the end of the easing cycle while maintaining a hawkish tone, emphasizing that the Copom’s inflation projection for the current relevant monetary policy horizon at 3.4% remains above the inflation target.
External scenario: More adverse and uncertain, requiring caution. Draws attention to the recent increase in U.S. trade tariffs on Brazil and its still uncertain impacts.
Economic activity: The scenario is unfolding as expected and is consistent with the current monetary policy.
Dovish
> Indicates some moderation in growth
> Base case: Such moderation is necessary for the output gap to open and inflation to converge to the target
> Credit: Clear moderation. Private payroll-deductible loans have had a smaller impact than many market participants expected
Hawkish
> Maintains the “mixed signals” view. At turning points in the economic cycle, it is natural to observe mixed signals
> The labor market remains dynamic
Inflation expectations: Notes improvements in measures of implicit inflation
Current inflation: Prices of industrial goods and food are losing momentum, but services remain above a level consistent with the target
Fiscal: Slight increase in concern regarding the fiscal outlook
