The president of the Central Bank of Brazil, Roberto Campos Neto, stressed on Friday that interest rates in the United States are currently an important beacon, with all eyes focused on inflation in the largest economy in the world, that has stopped reducing.
Speaking at an event organized by the Young President’s Organization (YPO), he said the issue is very relevant to global liquidity and that the body he presides over is discussing the external environment more than usual “because it is very relevant to us at the moment.” “.
Campos Neto said that if US rates remain high for longer there will be an additional pull of liquidity to the developed world, which will impact both emerging markets and corporate debt.
He also said that currently it is very difficult around the world for the political class to accept any type of fiscal tightening.
“What will happen is that life for central banks will be more difficult with expansionary fiscal policies,” he added.
After inflation data in Brazil showed an annual advance of 3.77% through mid-April, slowing from 4.14% in the 12 months through mid-March, Campos Neto said the reading appeared to have improved, but that I needed to examine the details.
He stressed that inflation expectations in the country have been rising, and that monetary policymakers are trying to understand the reasons for this, which could include rising oil prices and a stronger dollar.
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