A single data point above expectations does not, by itself, change the inflation trend.

The July IPCA came in below the target ceiling again, but interpreting the data requires caution.

In an interview with Valor Econômico, our partner and chief economist, Luis Otavio Leal, emphasizes that the result above expectations does not signal the end of the favorable inflation environment, but is also insufficient to anticipate a new Selic rate cut.

According to Leal, despite a relevant chance of a cut at the next Copom meeting, G5 Partners‘ expectation remains that the rate will be maintained, given the prospect of inflation reacceleration in the coming months and persistent pressures in services.

Read the full article here.