WEEKLY REPORT
Activity and inflation data reinforce our expectations for the interest rate cycle in Brazil and the United States – 02/13
✅ United States: January Payroll showed a broader recovery in employment, although still concentrated in a few segments, particularly education and healthcare. Despite the upside surprise in job creation, the overall reading remains one of labor market moderation, with a net decline in public sector jobs and a temporary acceleration in wages. On inflation, CPI rose 0.2%, below expectations, reflecting deflation in energy and contained goods prices, while core services inflation remains pressured. Taken together, the data reinforce the narrative of gradual disinflation and support the Federal Reserve’s cautious stance, with no imminent changes to the interest rate path.
✅ Brazil: January IPCA came in line with consensus, reinforcing the ongoing disinflation process, with pressures concentrated in administered prices and industrial goods, while services showed a more benign dynamic at the margin. On activity, services (-0.4%) and retail sales (-0.4%) surprised to the downside, adding to recent signals from industry and consolidating the view of a gradual economic slowdown, with early 2026 likely to remain subdued and the labor market as the last pocket of resilience. In light of inflation and activity data, as well as the tone from the Central Bank president, we maintain our expectation of the start of the easing cycle in March, with a 50bps rate cut.
