Scale 6x1 and fiscal risk block Selic cut and increase inflation
Copom points to the end of the 6x1 scale and the imbalance of public accounts as reasons for maintaining the high Selic rate. Understand the impacts on inflation.
TL;DR
- Copom maintained the Selic rate at 13.75% due to new economic risks.
- The end of the 6x1 work scale is considered a 'supply shock' that increases production costs.
- Market distrust in the federal government's fiscal management, with concerns about rising public debt, contributes to inflation expectations.
- High interest rates increase credit costs, leading to record household debt-to-income ratios and decreased consumption and investment.
- Sectors with continuous operations or low profit margins, such as supermarkets and restaurants, are particularly affected by the scale changes.