Brazil's price growth cooled more than economists thought in August, with the yearly rate landing at 4.22% versus a 4.27% consensus and down from 4.44% the month before. On a monthly basis, the index slipped 0.32%. The statistics agency highlighted a 1.87% decline in housing costs driven by a one-off electricity credit, alongside lower transportation and food and beverage prices.
Personal expenses went the other way, pushed up by a jump in cigarette prices. For context, Brazil aims for 3% inflation with a tolerance band of plus or minus 1.5 percentage points.
Inflation headlines may change, but steady steps help protect your long term savings. Join Briefs Finance CEO Jaspreet Singh on September 29th for a FREE live investor workshop, How to Profit From A Dollar That's Losing its Value, where he shows how we're spotting investment opportunities as the dollar falls. Save your spot.
With the Oct. 4 first-round vote approaching, President Luiz Inácio Lula da Silva is seeking a fourth term and taking steps to blunt price pressures tied to the conflict in the Middle East. His standing has suffered amid a softer economy and a stream of unfavorable headlines, and fresh polling shows him running neck and neck with his chief challenger, right-wing Senator Flávio Bolsonaro. On Tuesday Lula unveiled reductions to fuel taxes to cushion households from rising oil, a move that has helped keep consumer demand intact even with borrowing costs still in the double digits. Following the cooler print, interest-rate swaps tied to January 2029 dipped by 10 basis points during the morning session.
The inflation cooldown gives the central bank cover to keep easing. Markets expect another quarter-point cut next week, which would take the Selic to 13.75%. As Bloomberg Economics' Adriana Dupita put it, "The factors that drove Brazil's consumer prices down in August won't extend to September. Still, the slowdown in annual inflation and a tame core will reinforce policymakers' resolve to keep unwinding a very tight monetary policy."
When policy shifts happen, a clear plan keeps your goals moving forward. Our CEO Jaspreet Singh is hosting a FREE live investor workshop, How to Profit From A Dollar That's Losing its Value, on September 29th. Sign up free to join him live.
