Brazil Central Bank Faces ‘Nightmare’ Scenario in Interest Rate Decision

Brazil’s central bank will head into Wednesday’s high-stakes interest rate decision facing a dilemma that no monetary authority wants: a slowing economy with inflation racing above target.

All analysts surveyed by Bloomberg expect policymakers will raise the benchmark Selic by a full percentage point for the third straight time, to 14.25%, fulfilling the guidance given at their December decision. But what investors really want to know is what central bankers led by Gabriel Galipolo will do next.