With economic growth still at a robust level, the FED is not expected to cut interest rates in 2024, impacting a higher terminal Selic – 04/26
26 Thus, we revised our expectation of 2 cuts in the Fed Funds to no cuts in 2024.
Based on this premise, we incorporated a more depreciated exchange rate scenario for the year, moving from R$5.10 to R$5.20 in 2024 and RS5.00 to RS5.05 in 2025. In domestic inflation, the depreciation of the exchange rate should be felt in the rise of industrial goods. Therefore, we revised our annual IPCA projection from 3.6% to 3.8% this year, with 2025 at 3.5%, compared to the previously forecasted 3.4%.
On the monetary policy side, we expect 2 more cuts of 25pp in 2024, with the rate ending the year at 10.25% (against 9.25% previously projected.)
For more information, please check our Weekly Report 61.
