The monetary easing cycle in the United States is expected to begin in September, with consecutive cuts until the end of the year – 08/16
With recent data on the labor market, inflation, and economic activity, we believe that the U.S. economy will slow down in a soft landing, avoiding a recession. Therefore, we have revised our expectation from 2 cuts in the FED Funds rate to 3 by the end of the year, starting in September with a 25 bps reduction and continuing with the same magnitude in the November and December meetings, ending the year at 4.75%. For 2025, we expect a terminal rate of 3.5%. In Brazil, June’s activity data positively surprised, reinforcing the narrative of a resilient economy in the second quarter of the year. From the monetary policy perspective, hawkish statements from Central Bank members are well received by the market.
For more information, please check our Weekly Report 77.
