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JPM Expect Final SELIC Hike of 50bps in June

BRAZIL
  • On Brazilian monetary policy, JPM write that they expect a final 50bp hike in June, and have revised their 2022 CPI forecast higher to 9.1%.
  • Despite continuing to look for a final 50bp hike in June, they recognize that economic fundamentals suggest the balance of risks is now asymmetrical to the upside relative to their expected terminal SELIC rate of 13.25%.
  • They add in the last meeting, BCB affirmed that the interest rate scenario of terminal SELIC at 12.75% was sufficient for the convergence of inflation to target. However, now the central bank has removed this signal of the end of the cycle. JPM look for further clarification of these points in this week’s minutes.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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