BCB’s Serra Says Disinflation Process Is Still Very Incipient

Full recap of Brazil Central Bank’s Serra Comments, Speaking At An Event:

• Says global demand shock starting to normalize
• Brazil central bank sees signs of slowing global activity
• Brazil's inflationary memory makes work difficult
• Not sure we can say that inflation is reversing
• Brazil disinflation process is still very incipient, BCB has been surprised, we need caution
• Inflation expectations for 2024 bother him
• Central bank needs a few quarters being vigilant
• Brazil activity needs to slow down for inflation to drop, Brazil is debating degree of idleness in economy
• Brazil job market is at a level that requires attention
• Brazil monetary tightening to be felt more strongly in 2H
• CPI above target is inconsistent with rate drop, central bank sees quite quick inflation drop
• Central bank must always be willing to act in FX, although FX market seems quite balanced (ALL BBG)