Itaú BBA - Copom minutes: Caution at this stage

Macro Brazil

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Copom minutes: Caution at this stage

noviembre 5, 2019

The document reinforced the expectation of an additional 50-bp cut at December’s meeting, but indicated caution going forward.


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

• The Copom minutes reinforce the indication of another 50-bp cut of the Selic rate in the December meeting. However, given the actual stage of the business cycle, the committee also reinforced the need for caution thereafter, raising questions about the extent of the easing cycle. In particular, the Copom has discussed how the diminishing role of the State in the economy, changes in credit markets and in financial intermediation may have increased uncertainty about the transmission of monetary policy. We are maintaining, for now, our call that the Copom will cut the Selic rate to 4.5% in its final meeting of the year, and to 4% pa by March 2020.
 

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



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