Brazil Monthly Inflation Eases More Than All Analysts Expected
Comment of the Day

February 07 2020

Commentary by Eoin Treacy

Brazil Monthly Inflation Eases More Than All Analysts Expected

This article by Mario Sergio Lima for Bloomberg may be of interest to subscribers. Here is a section:

Policy makers capped their easing cycle this week in a bet that aggressive borrowing cost reductions will help fuel growth without jeopardizing inflation control. Central bank President Roberto Campos Neto has said he’s comfortable with the consumer price outlook despite a recent spike in meat costs and possible pressures from a weaker real. Economists surveyed by the monetary authority expect inflation to ease well below target by year-end.

Eoin Treacy's view

Brazil cut interest rates this week and now has negative real interest rates. Water shortages in Rio de Janeiro are only going to make the case for additional stimulus more compelling since repairing vital infrastructure is unlikely to meet which much local opposition.

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