Yesterday, Brazil’s Ibovespa index fell for the fourth consecutive day, hitting a low of 125,000 points in May. At the same time, the Brazilian real weakened globally as the U.S. dollar rose by 0.78% to R$5.164.
The declines were attributed to comments made by Brazil’s Finance Minister Fernando Haddad on local monetary policies and the cautious outlook in the Federal Reserve’s recent meeting minutes. Haddad assured the public of fiscal stability, with inflation well below the 3% target.
Highlighting Brazil’s high real interest rates and effective fiscal policies managing inflation, Haddad advocated for a broader economic strategy beyond interest rate adjustments. Meanwhile, Wall Street also saw declines with the Dow Jones, S&P 500, and Nasdaq all falling due to the Fed’s cautious approach.
The Fed’s concerns about rising inflation risks were outlined in their minutes, while in Brazil, the potential positive impact of Petrobras’ extraordinary dividends is being closely monitored. As Brazil faces challenging economic conditions, global and domestic policies will play a crucial role in determining market direction.
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