Itaú BBA - Copom Minutes: caution ahead

Macro Brazil

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Copom Minutes: caution ahead

junio 23, 2020

The Copom minutes reinforce the perception that the authorities will not move in the next policy meeting


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

 

 The Copom minutes, in our view, reinforce the perception that the authorities will not move in the next policy meeting and, probably, for the duration of the year. Where the previous text mentioned “gradualism”, the current version indicates “caution”. The committee concedes that changes in the inflation outlook might lead it to revisit this strategy, but indicates that, at this moment, a pause seems the dominant scenario. The Copom notes that fiscal transfers might mitigate the recession, but also stresses its concerns with fiscal risks. There is continuing discussion of a lower bound, which is another reason for caution. We expect the Selic to end the year at its current level, 2.25% pa.


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



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