Brazil is approaching 8% interest rates in 2024 after the transition in the US

“The twist in the Fed chairman’s speech to hint at more cuts next year changes the outlook for the end of this year and next year. Here Cobom cut 0.50 and signaled in the plural that it will continue to cut. By March it was already higher. Or lower, the Selic will come in at 10.75%, And many are revising the terminal SELIC below 9% in October, November next year. Many are putting 9% to 8.5% and even 8%.”

Deborah Noguera, chief economist at Tenox Capital, revised Selig’s forecast for 2024 after the events of Super Wednesday last week. “Initially, we had a terminal Celiac projection of 9.5%, but today’s events lead us to adjust it to between 8.5% and 9.0%.”

AZ Quest’s chief economist Alexandre Manoel said in an analysis that defends Copom’s maintenance of 0.5 percentage point cuts that the Selic will reach 7.75% if it maintains 0.5 percentage point cuts throughout 2024. By the end of the year, “it’s highly unlikely, but not impossible, to reach this rate.”

Three months ago, in mid-September, Finance Minister Fernando Haddad was already eyeing the move in US interest rates and the start of cuts as key data for Brazil. “If it’s a happy coincidence that they start cutting there at a time when BC thinks they should stop cutting here, there could be a good movement.”