Brazil's Plunging Inflation Calls Defy Key Rate Guidance: Chart

Economists are quickly adjusting their expectations for Brazil’s 2017 inflation as a slew of price indexes come in below market consensus. They now expect the benchmark IPCA index to end the year at 3.64 percent, the lowest in over a decade and below the central bank’s 4.5 percent target. The fast drop in inflation expectations could encourage the bank to keep cutting interest rates by 100 basis points, rather than slowing that pace as recently signaled by policy makers.

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