Central Bank raises tone regarding the last COPOM meeting but frustrates market expectations – 02/08
The maintenance of the interest rate at 10.50% per annum was widely expected by market institutions, with divergences centered on expectations of a clearer signal of a possible rate hike resumption, given the recent worsening of the domestic scenario. It is important to note that the committee did not rule out the possibility of resuming the rate hike cycle; however, by not explicitly stating this necessity, the message was interpreted as less hawkish, causing market reactions. The statement currently signals a preference for keeping the interest rate until the end of 2025 over resuming the rate hike cycle. Regarding inflation, we revised our projection for 2024 from 4.3% to 4.4%, incorporating the increase in cigarette taxation. In the United States, the July FOMC meeting made the prospect of Fed Funds rate cuts in September more prevalent.
For more information, please check our Weekly Report 75.
