JPMorgan, Itaú, and Santander anticipate an earlier cut in Selic rate

Major banks JPMorgan, Santander, and Itaú Unibanco now predict Brazil’s Central Bank will make its first interest rate cut in September, two months earlier than previously expected.

This follows improvements in inflation data and projections, writes Bloomberg.

According to a recent report, JPMorgan predicts a quicker onset to the easing cycle. The Bank anticipates the basic interest rate will drop from 13.75% to 12.25% by December, starting with a 50 basis point cut in September.

Itaú has lowered its 2023 inflation estimate from 5.8% to 5.3% and expects a 25 basis point rate cut in September.

Santander economists report that the Central Bank’s tightening policy is showing initial effects on the economy and inflation, and they’ve revised their year-end rate prediction to 12.50%, down from 13%.

There are increasing calls from government officials and business leaders for the Central Bank to initiate rate cuts at the next Monetary Policy Committee meeting.

With information from Bloomberg

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