Brazil 10-Year Yield Retreats from Ten-Year High
The yield on the 10-year Brazilian government bond fell to the 15.2% level from the ten-year high of 15.75% reached on November 3rd after the government’s economic team presented a preliminary fiscal adjustment proposal to Congress. Although details remain scarce, it is the first concrete sign of public-account adjustment since President Lula’s reelection. Earlier this month, Lula reiterated that his government is committed to fiscal responsibility while also considering social responsibility, amid pressure to announce adjustment measures after Brazilian assets plunged following his late-October reelection. Meanwhile, BCB policymakers suggested in the latest meeting minutes that elevated interest rates have already dampened economic activity, hinting that rate cuts may be needed to address slower growth and risks to unemployment.
The yield on the 10-year Brazilian government bond fell to the 15.2% level from the ten-year high of 15.75% reached on November 3rd after the government’s economic team presented a preliminary fiscal adjustment proposal to Congress. Although details remain scarce, it is the first concrete sign of public-account adjustment since President Lula’s reelection. Earlier this month, Lula reiterated that his government is committed to fiscal responsibility while also considering social responsibility, amid pressure to announce adjustment measures after Brazilian assets plunged following his late-October reelection.
Meanwhile, BCB policymakers suggested in the latest meeting minutes that elevated interest rates have already dampened economic activity, hinting that rate cuts may be needed to address slower growth and risks to unemployment.