TradeMap: 12/07/2022
According to Andrea Damico, partner, and chief economist at Armor Capital, the Central Bank (BC) intensified its concerns with the fiscal outlook, which had been already expected by the market.
“The BC mentioned that there are higher uncertainties regarding fiscal framework and fiscal stimuli that imply stronger demand aggregate, in line with the last Central Bank Governor [Roberto Campos Neto] speeches”, says Damico.
The higher fiscal uncertainty, according to Damico, elevates assets’ risk premia, resulting in exchange rate depreciation and postponing the disinflation process, since inflation was showing a downward trend.
