The central banks of Brazil and Mexico loosened policy this month, and we expect that they will continue to cut rates in Q4. Inflation in both countries is below target, and both economies are struggling and in need of policy support. In Mexico, dovish votes at this month’s meeting prompted us to reduce our end-year rate forecast from 7.50% to 7.25%. In Brazil, however, we think that market expectations of another 75bp of cuts are overly dovish; we expect one more 25bp cut, taking the Selic to 5.25%.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services