Itaú BBA - Copom Cockpit: Another 50-bp cut on the way

Macro Brazil

< Volver

Copom Cockpit: Another 50-bp cut on the way

septiembre 13, 2019

We believe the backdrop for our scenario of a continued easing cycle has not changed significantly since the last policy decision.


For the version with all charts and tables, please open the attached pdf file
 

• The Brazilian Central Bank's Monetary Policy Committee (Copom) meets again next week. We expect only a small change in the inflation forecast in the market scenario (which includes exchange and interest rates according to the Focus survey), with a retreat to 3.4% from 3.6% for 2019, remaining stable at 3.9% for 2020. In the reference scenario (which assumes constant exchange and interest rates), estimates will likely decline to 3.4% from 3.6% for 2019 and rise to 3.7% from 3.6% for 2020.

• The backdrop for our scenario of a continued easing cycle has not changed significantly since the last policy decision. Hence, we expect the Copom to cut the Selic rate to 5.50% p.a. in the September 17-18 meeting.

• Down the road, as the economic recovery will likely remain sluggish in the coming months and the outlook for inflation remains benign, we believe the Selic will reach 5.00% p.a. by year-end.
 

For the version with all charts and tables, please open the attached pdf file
 



< Volver