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Economics

Brazil Central Bank Stance Prompts Rush of Rate Forecast Changes

  • Central bank anticipates another 100 basis-point rate hike
  • Swap rates are falling, while some economists lift Selic calls
A worker refuels a motorcycle at a gas station in Sao Paulo, Brazil.

A worker refuels a motorcycle at a gas station in Sao Paulo, Brazil.

Photographer: Victor Moriyama/Bloomberg
Updated on

Brazil economists and traders are fine-tuning their interest rate forecasts after the central bank raised borrowing costs by 100 basis points and pledged another increase of the same size in May. 

Major Wall Street banks including JPMorgan Chase & Co. and Barclays Plc lifted their peak Selic estimates above 13% after policy makers issued new guidance. Meanwhile, traders who had priced in smaller hikes after May are now paring those bets, prompting interest rate futures to fall in Thursday trading.