The bank’s projection follows the upward trend announced by Copom last Wednesday (September 18), in which the BC increased by 0.25 pp
Following the decision to raise the Selic rate by 0.25 percentage points by the BC (Central Bank), the JP Morgan projects that the Brazilian basic interest rate will reach 11.5% at the beginning of next year, according to a report released to clients and the market on this 5th fair (18.Sep.2024).
According to economists Cassiana Fernandez, Vinicius Moreira and Mirella Mirandola Sampaio, at this moment, the expectation is that the pace of tightening of 25 basis points will continue until the Selic rate reaches 11.5% at the beginning of next year.
Experts considered the tone of the statement Copom (Monetary Policy Committee) of the Central Bank as “hard”as expected, highlighting the main inflationary pressures, such as strong activity, a pressured labor market and unanchored inflation expectations.
“The Central Bank also revised its output gap to positive for the first time in years. What was unexpected – and more aggressive – is that inflation projections reached the highest final level in our range of expectations for the scenario, with the consensus Selic rate and dollar expectations at R$5.60.”highlighted the experts.
With an asymmetric balance of risks upwards, indicating a chance of higher inflation, “this worrying outlook for inflation in the BCB’s own forecasts suggests that the risk of a faster evolution or a more prolonged cycle is significant at this time”.
With information from Investing Brazil.
Read more:
#Selic #reach #early #Morgan