Brazil and Chile Traders Call for Bolder, Faster Rate Hikes
- Brazil seen raising 50bps at each of its seven 2021 meetings
- Chile expected to tighten by 190bps over the next two years
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Traders in Chile and Brazil stepped up their rate hike bets amid a surge in U.S. yields, demanding central banks to be bolder and faster in fighting rising inflation expectations.
Swap rates in both countries, which were already anticipating rate hikes this year, rose further last week amid reflation trade bets and a rally in copper and oil prices. Now, curves are pricing in aggressive monetary tightening cycles, way beyond what economists forecast and central banks have been signaling.