Week Marked by Monetary Policy Decisions in a More Inflationary Environment
In Brazil, the Copom raised interest rates to 13.25% and issued a neutral to slightly dovish statement. We project a terminal rate of 15.0%, but with an upward bias.
Labor market pressures on inflation remain. The Continuous Househould Sample Survey showed an unemployment rate of 6.2% at year-end,with an annual average of 6.6%—the lowest in historical records.
On the external front, indications also point to increased economic Activity. Therefore, we believe that this FOMC decision is not just an isolated pause but rather a prolonged hold in the Fed’s monetary easing cycle, which islikely to keep the U.S. dollar strong.
For more information, please check our Weekly Report 98
