The decision by the Central Bank of Brazil last night to cut interest rates by 75bps to 9% was widely expected. Instead, the critical issue for investors is whether this marks the end of the current easing cycle and, perhaps more importantly, how quickly the Bank may now be forced to start tightening policy. While there are signs that the economy is starting to find its feet after a difficult second half to 2011, we think it is too soon to rule out further cuts and, moreover, doubt that policymakers will start to raise rates as quickly as the market currently expects.
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