09/20/2023 – 21:37
The Central Bank, in the statement from the Monetary Policy Committee (Copom) released this evening, does not provide any “loophole” for an increase in the Selic rate of decline to 0.75 percentage points, assesses the chief economist at Quantitas Asset, Ivo Chermont. He states that there was a discussion about the possibility of Copom adjusting the forward guidance maintaining the pace of 0.50 percentage points in relation to the August statement, changing “next meetings” to “next meeting”.
“The BC, at no time, gave a signal for acceleration, not even for December. They maintained the plural in the next meetings, leaving no room for a 75-point pace. The data is there and it could change, but that’s it for now,” he said.
According to Chermont, “the truth is that from one meeting to the next, practically everything got worse.” He lists that the global scenario has become more uncertain, as the Copom itself mentions when talking about the American curve and China’s economy and, here, activity is stronger, “with everyone revising the year’s GDP upwards”.
One point that in theory could have been assessed by the Copom as a dove, and was not, was the relief in underlying inflation. “There was no emphasis on improving the core,” he highlighted.
Regarding the fiscal issue, the economist said that there was doubt as to whether the BC would “reintroduce” the fiscal risk into the risk balance, given that, in concrete terms, there was no new fact, but just a worsening in the market’s perception given the government’s difficulty with revenues and underestimation of expenses. “Our conclusion yesterday was that it would not be included, but surprisingly, it introduced a new paragraph and reinforced the importance of the government and Congress pursuing established goals,” he said. For him, in practice, “the qualitative aspect of the fiscal worsening was, in a certain way, included in the balance of risks”.
The economist reiterated the Selic scenario at 8.5% at the end of the cycle, being reduced at a rate of 0.50 points in all meetings up to that level.
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