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BRAZIL: Bank of America Calling for Against Consensus Final BCB Cut

BRAZIL
  • Bank of America expects the BCB to reduce interest rates by 25bps before pausing the easing cycle.
  • Since current inflation is under control, we see that there is still room for a marginal cut on interest rates. Given the adverse external and internal conditions, the easing cycle will probably be paused after this cut, with the Selic rate ending the year at 10.25%.
  • BofA sees the Selic cycle being resumed at the beginning of next year, under a new central bank board and amid better financial conditions, after the Federal Reserve starts cutting rates.

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