Brazil’s mid-month inflation gauge rose 0.41 percent in early June, marking a second consecutive month of disinflation and reinforcing the case for the central bank to resume cutting interest rates.
The data point, known as IPCA-15, came in below market forecasts, signaling that price pressures are easing faster than anticipated.
The softer print has immediately altered the probability landscape for monetary policy.
With inflation cooling, the path is now clear for the Central Bank of Brazil to restart its easing cycle, a shift that had been delayed by persistent price pressures earlier in the year.
This development marks a significant pivot from the previous tightening stance that characterized much of the recent policy cycle.
Market expectations have already begun to adjust.