Gold prices steady ahead of Fed decision; weekly weakness noted
Investing.com - Brazil’s central bank raised its benchmark Selic interest rate by 25 basis points to 15.00% last Thursday, in a unanimous decision that surprised some market participants.
The Monetary Policy Committee (Copom) indicated that rates would remain at a "significantly contractionary level for a very prolonged period," signaling a hawkish stance on monetary policy for the foreseeable future.
Bank of America analysts expect the Brazilian central bank (BCB) to maintain the current high rate until December 2025, when they anticipate the first rate cut will occur.
This timeline differs slightly from the broader market consensus, which forecasts the first cut of 25 basis points to come in January 2026, according to BofA’s research note titled "Brazil in Focus."
The key question highlighted by Bank of America is determining how long the central bank will need to maintain these elevated rates, as Brazil navigates its current economic conditions with the Selic at its highest level since 2016.
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