Brazil: modest recovery to keep rates lower than most expect

The Brazilian Central Bank (BCB) lowered interest rates by a further 50bps last night and hinted that the end of the current easing cycle may now be very close. We think that the consensus expectation for a strong rebound in growth over the next 6-12 months is overly optimistic and remain of the view that rates will stay lower, for longer, than the market currently anticipates.

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