Brazil’s inflation is at a high level that requires attention, the central bank said in response to a report showing that consumer prices rose in January at the fastest pace in almost eight years. The 12-month inflation rate reached 6.15% in January.

“We are going to see the central bank continuing to use the spot currency as its main monetary policy tool for the moment,” said an asset manager.

Bottom Line: The fact that the Central Bank went public to demonstrate concern about the level of prices made ​​investors foresee the possibility that Brazil’s monetary authority may change its strategy ahead of schedule. The yield curve begins to show a real chance of the SELIC rate to go up in the second of this year.

Source: Valor, Bloomberg, Itau

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7 Responses to Chart: Brazil’s inflation is high and needs attention

  1. Particularily food is getting expensive. Where did I read, the Big Mac index shows an overvalued Real? In other words the Big Mac is too expensive here. My gut feeling is that people are – once again – foreseeing a big crisis. Nothing new in Brazil. And all merchants try to cash in as much as possible as long as possible. That’s what is going on – my subjective impression. Anyone who feels the same? Am I wrong?

  2. frank stein says:

    The stagflation will only get worse. Caterpillar has workers on furlough in Piracicaba. Sooner, rather than later, unemployment will creep up. The debt bubble will explode big time.

  3. anamirandabh says:

    We are all expecting something big – even if it’s “just” a big stagnation – for soon, very soon.

  4. Brazil says:

    When commodities are dollar priced and there is a “currency war” or debasement, you have this problem. It is no different than what has happend in other parts of the world like in the middle east, which saw up to 15% inflation . . .

  5. Jojo says:

    Print money, invest in guns, nuclear weapons.

  6. frank stein says:

    The horror show of thousands of trucks stagnated bumper to bumper is about to start during the harvest, showing once more the monumental incompetence of the corrupt and negligent Brazilian governments. These idiots keep talking about bullet trains and other schizophrenic schemes.

  7. Shinestar says:

    During the Inflation what all other consequences are there..can someone be brief? This is my research for my econs project.

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