WEEKLY REPORT Copom and FOMC: caution prevails in a week of monetary policy decisions – 24/04
✅ In Brazil, the week will be marked by the Copom decision, in an environment that remains challenging since the last meeting. Externally, uncertainty remains elevated, especially via oil and its spillovers to inflation and global financial conditions. Domestically, activity continues on a moderating path, while inflation expectations have shown additional de-anchoring across the relevant horizon. In terms of communication, next week’s decision should bring few changes, with the Committee preserving flexibility and avoiding any firmer guidance amid elevated uncertainty.
✅ In the United States, the week will also be marked by the FOMC decision, with expectations for the policy rate to be maintained in the 3.50%–3.75% range. Since the March meeting, the scenario has changed little in structural terms, which supports a cautious stance by the Fed. Recent communication reinforces the signal of a prolonged period of stability, with the Committee avoiding any indication of imminent cuts. The tone remains more hawkish, reflecting both the resilience of the economy and the difficulty in the disinflation process. On the institutional front, Kevin Warsh’s recent hearing reinforces this view, by indicating a more technical and cautious conduct of monetary policy ahead.
✅ Finally, the geopolitical backdrop remains at the center of attention, with the conflict in the Middle East still marked by elevated uncertainty and limited progress in negotiations. Despite temporary ceasefire extensions, the impasse between the US and Iran persists, especially around the blockade of the Strait of Hormuz, which continues to affect global oil flows. Recent episodes show that, although there is some resilience in Iranian exports, logistical disruptions and rising tensions in the region continue to keep international prices at elevated levels.
