Central Bank of Brazil

Thursday Central Bank Derby Results in Japanese Forex Intervention, Many Interest Rate Hikes, and One Bizarre Cut

September 22, 2022

Net overnight movements in the dollar have ranged widely from a 1.8% plunge against the yen to a 1.1% rise versus the Swiss franc. In between, the dollar fell 0.3% versus the euro, Australian dollar, and sterling. After numerous rhetorical complaints by officials about the weakness of the yen, Japanese officials sold foreign currency directly […] More

Brazil’s Selic Interest Rate Hiked 50 Basis Points to 13.75%

August 3, 2022

The monetary policy committee at the Central Bank of Brazil, known as Copom, today implemented its twelfth interest rate hike since March 2021. After cutting the rate by 250 basis points during 2020, the rate level when normalization began was 2.0%. Seven increases during 2021 had totaled 725 basis points, and today’s move was the […] More

Brazilian Central Bank Interest Rate Hike

June 16, 2022

The Central Bank of Brazil’s Selic rate was unanimously raised by another 50 basis points to 13.5%. Brazil is one of several Latin American countries with a legacy of past inflationary blowouts and has to be very careful in the current global environment. From a pandemic low of 2.0% up to March 2021, the Selic […] More

Comparing the Central Bank Interest Rate Paths of the United States, Brazil, U.K., Iceland,Poland and Czech Republic

May 5, 2022

All six of the central banks in this comparative study had interest rate hikes announced either today or yesterday. In none of the cases was the increase the first one of the current cycles. All these tightening cycles represent responses to accelerating inflation caused in large part by external factors like the pandemic, policy responses […] More

Following the Fed’s Lead to an Extent

May 5, 2022

Wednesday saw a post-FOMC rally in U.S. equities and commodity prices but a drop in the dollar and 10-year Treasury yield. The 50-basis point interest rate hike and the details regarding Fed balance sheet reduction were aligned with market expectations, but Powell’s press conference was more dovish than expected, especially his quelling of the possibility […] More

Central Bank of Brazil Tightens for a Ninth Time

March 17, 2022

A full percentage point increase in the Central Bank of Brazil‘s Selic rate to 11.75% matched what analysts were expected. The move was agreed unanimously, and a released statement foreshadows a similarly-sized rate hike at the next policy review: “For its next meeting, the Committee foresees another adjustment of the same magnitude. The Copom emphasizes […] More

Inflation and Russian Invasion of Ukraine Casting Longer Shadows

March 17, 2022

Equities behaved in a widely diverse way overnight after the Fed enacted the first of many rate hikes. Share prices closed up by 7.0% in Hong Kong, 3.5% in Japan, 3.0% in Taiwan, 1.8% in India, 1.7% in China, and 1.1% in Australia. But stock markets so far are down this Thursday by 1.0% in […] More

Central Bank of Brazil

February 3, 2022

Officials at the Central Bank of Brazil authorized a 150-basis point hike of their Selic interest rate to 10.75%. From a pandemic low of 2.0% prior to March 2021, there have been eight increases totaling 875 basis points. Brazilian CPI inflation accelerated from 4.6% in January 2021 to just over 10% currently and way above […] More

Omicron, Central Banks, ISIS, Metaverse, OPEC, Russia, Inflation and January PMIs Vying for Market’s Attention

February 3, 2022

The top leader of ISIS and his family have died after a U.S.-led raid in Syria. Geopolitical tensions between the U.S. and Russia remain very high. A total of 3,623 Covid-19 deaths yesterday in the United States were the greatest single-day total in a year. Omicron affected numerous service-sector and composite purchasing manager surveys reported […] More

Brazilian Selic Rate Began 2021 at 2.0% and Ending the Year at 9.25%

December 8, 2021

The Copom committee at the Central Bank of Brazil that decides monetary policy settings unanimously voted to hike its Selic interest rate by 150 basis points to 9.25%, matching the previous advance in October that had been the largest since 2002. Rate cuts of 250 basis points in 2020 have been far exceeded in 2021 […] More