No Disinflation Here

Consumer price inflation readings for the month of August suggest that the Brazilian economy is entering a period of higher seasonal price pressures, reinforcing our view that the surprise 50 basis points (bps) rate cut on August 31 was premature. Brazil's broad national consumer price index (IPCA) grew by 7.23% y-o-y in August, up from 6.87% in July, and is now 73bps above the upper limit of the central bank's inflation target.

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