Barclay’s thinks so. Here is their comment on the rate cut:
“Even though markets had been pricing in some easing (a 25bp cut with a 65% probability), the decision to cut by 50bp surprised almost everybody. And there is growing concern that the move could reflect political pressure as well as the urge to use the global crisis as an excuse to force real rates down. These are enough reasons to keep the longer end of the domestic yield curve under relative pressure and in a bull-steepening trend. Another concern is that such a bold move could imply that the government either already has more information about the slowdown of the economy or is moving based on an expected deterioration of the global economy. It is always prudent to prepare for the worst and hope for the best, but in our view it would be better first to halt the tightening cycle and announce that the bank is ready to move instead of abruptly shifting gears from tightening to easing. The risk of expecting a revival of the 2008-09 crisis and acting more aggressively than back then is being forced to reverse gears in the near future if the worst fails to materialize.” — Marcelo Salomon and Roberto Melzi, Barclays Capital, New York.