Economics
Brazil’s Central Bank Cautions Against Hiking Rates Too Fast
- Campos Neto stopped short of repeating guidance of 150bpp hike
- Most analysts see inflation near the target’s ceiling in 2022
This article is for subscribers only.
Brazil’s central bank chief is concerned with above-target inflation expectations for next year but cautioned against hurting growth prospects by raising interest rates too fast.
Roberto Campos Neto said policy makers should be mindful that economic models in a post-pandemic world have limitations and may fail to accurately capture the lagged impact of monetary policy on prices. At the same time, they need to make sure inflation expectations don’t rise above target, which could lead to loss of credibility in the bank’s work and further fuel inflation.