Copom nears the end of the cycle but still hawkish

The statement accompanying the Brazilian central bank meeting yesterday, at which the Selic rate was hiked by 150bp to 10.75%, made clear that policymakers will slow the pace of tightening from here. But with inflation worries still prominent, we think they will opt for a sizeable 100bp hike in March and a 50bp increase in May, taking the Selic rate to 12.25% in this cycle (previous forecast 11.50%).