 WEEKLY REPORT Inflation sends mixed signals in Brazil and the United States – 08/14
✅ In Brazil, this week’s data provided a more cautious reading of current inflation, while activity indicators continued to point to a gradual loss of economic momentum. In the Copom minutes, the Committee maintained a cautious and data-dependent communication. Its assessment of economic activity was expanded, highlighting the broad-based moderation in growth and the cumulative effects of restrictive monetary policy on both activity and the disinflation process. At the same time, the Committee maintained its concerns over the de-anchoring of inflation expectations and reiterated the need to maintain a restrictive policy stance.
✅ In the United States, this week’s inflation data remained relatively benign, despite some acceleration in core components at the margin. Combined with recent signs of weakening in the labor market, the data strengthened market expectations that the Federal Reserve will keep interest rates unchanged in September. In our view, the overall set of releases reduces the need for a more restrictive policy stance, although the Committee is still likely to wait for clearer evidence of sustained disinflation.
