By Luana Maria Benedito and Gabriel Burin
SAO PAULO/BUENOS AIRES (Reuters) – Economists are uncommonly split over the size of a mostlikely Brazil interest rate decrease on May 8, a Reuters survey discovered, amidst altering views about the future course of U.S. financial policy and relentless regional inflation concerns.
In August 2023, the main bank released a series of 6 successive 50 basis points rate cuts from a six-year high of 13.75% to 10.75% presently, pleasing market expectations policymakers had telegraphed well in advance.
But Banco Central do Brasil (BCB) justrecently stopped offering clear forward assistance and embraced a more hawkish tone, leading to uncommonly divergent views for its near-term method, integrated with calls for a more orthodox position ahead.
Of 39 financialexperts surveyed inbetween April 29-May 3, 22 stated the bank’s rate setting committee, understood as Copom, would ease by 25 basis points to 10.50% at its next conference on May 8, while the other 17 stuck to a 50 basis points relocation to 10.25%.
“The current shift in our Fed call to a single cut in December puts extra pressure on the BCB to