Lates News

Against the backdrop of inflation still above target levels and an expected slowdown in economic growth, the Brazilian central bank has slowed down its pace of interest rate hikes. The monetary authority raised the benchmark interest rate from 14.25% to 14.75%, consistent with previous guidance. Prior to this rate hike, the central bank had raised interest rates three times in a row, each time by one percentage point, pushing the benchmark rate to its highest level since 2006. The central bank's Monetary Policy Committee did not provide specific guidance, but stated that the next steps will depend on economic data. The committee mentioned that high inflation expectations, a resilient economy, and a strong labor market all together "require a significantly tight monetary policy to ensure inflation approaches the target level for a prolonged period." These decision-makers also noted the heightened global economic uncertainty brought on by U.S. trade policies. The Monetary Policy Committee stated: "Due to the adverse and especially uncertain global environment caused by the United States' economic policies and prospects, mainly its trade policies."