MNI BRIEF: BCB Gov-2025 Expectations Jump To Affect Forecasts
Brazil's Central Bank governor Roberto Campos Neto said several factors are contributing to this unanchoring, such as fiscal policy and BCB credibility.
Brazil's Central Bank governor Roberto Campos Neto said Friday a recent surge in 2025 inflation expectations will probably impact long-term forecasts, adding that several factors are contributing to this unanchoring, such as fiscal policy and the credibility of the monetary authority.
"We have seen inflation expectations rising significantly. For 2025, this will apparently also impact the longer term. And when we look at the implied expectation (in government bonds), we see a slight rise as well," Campos Neto said at an event sponsored by the Monetary Studies Center (CEM) of FGV/IBRE.
"More recently, we have seen long American curves coming in and the terminal rate even returning a bit, but Brazil has hardly improved at all. So it seems that in this movement we have gone a bit against the emerging world, which suggests that a specific Brazil premium has been added to the curve in recent weeks," he added. (See MNI INTERVIEW: Copom To Hold At 10.50% - Ex-BCB's Kanczuk)