End of the 6x1 shift and distrust of Lula stall Selic rate cut
Copom includes the end of the 6x1 shift among the shocks that are stalling the Selic rate cut. Market sees higher inflation in 2027. Read in Gazeta do Povo
TL;DR
- The end of the 6x1 work schedule is increasing national production costs.
- Market interest rates remain high due to a lack of credible fiscal consolidation plans.
- The Selic rate was maintained at 13.75% by the Monetary Policy Committee (Copom).
- Copom identified the end of the 6x1 scale as a supply shock impacting labor costs.
- Inflation expectations for 2027 have risen, reducing the possibility of interest rate cuts.
- The financial market views fiscal risk perceptions as a key concern.
- Sectors like supermarkets, restaurants, and essential services are facing the initial severe impact of the shift reorganization.
- The Brazilian government faces pressure to implement transparent and sustainable fiscal adjustments.