Most of the market expects a 0.25 point increase in Selic in Brazil and a cut of the same magnitude in the United States.
BRASILIA – Brazil and the United States are expected to follow opposite paths regarding monetary policy on Wednesday 18. The market is betting that the Brazilian Central Bank will begin a cycle of increases in the base interest rateTHE Selicthe expectation is that the Federal Reserve (Fed)the American Central Bank, begins to lower interest rates there. But what is behind these antagonistic movements between the two monetary authorities?
There are three main differences, at this time, between Brazil and the United States in relation to the struggle inflation. There, the economic activity data are weaker than expected, inflation is retreating and there are even fears of a more pronounced recession. Here, on the contrary, GDP surprises on the upside, the IPCA – official price index – is hovering around the target ceiling and projections for the next few years are “unanchored”, that is, far from the 3% target.
