Itaú BBA - Quarterly Inflation Report: forecasts indicate new easing cycle in 2019

Macro Brazil

< Volver

Quarterly Inflation Report: forecasts indicate new easing cycle in 2019

junio 27, 2019

Central bank´s forecasts indicate new easing cycle in 2019.

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

The June 2019 inflation report shows inflation forecasts consistent with Selic rate cuts in 2019, although they do not corroborate the view of that interest rates can be maintained at the new record low level in subsequent years. In fact, forecasts that consider the Focus survey trajectory for the Selic rate (which incorporate rate cuts in 2019 and increases in 2020 and 2021) show inflation slightly below the target in 2020 and slightly above the target in 2021. We believe that these estimates corroborate our expectation that the Copom will restart an easing cycle of monetary policy with a cut of 0.25 pp at the meeting on July 30 and 31, provided there is concrete progress in the reform agenda until then.



< Volver