Turim’s Insights

A monthly conversation with our team about markets and strategies

10 May 2023

The approaching end of the interest rate hike cycle in the United States and the future dynamics of the Central Bank of Brazil were the main highlights of this month’s webinar.

In the US, the deterioration of regional bank stocks was accentuated in April. This movement, however, ended up benefiting the main banks in the country, explained Fernando Verboonen, our partner and CIO.

“Thus, it is clear that the problem is focused on the flow of regional banks and that, despite these ongoing challenges, there are no signs of systemic stress”, he assesses.

Even so, the possible impacts of this North American banking issue, combined with the slowdown in activity and the drop in inflation in the country, led the market to price a premature start to interest rate cuts by the Federal Reserve.

In Brazil, the Central Bank kept the Selic rate at 13.75%, making subtle adjustments in the communication, which still do not seem enough to indicate a cut in the basic interest rate in the near future.

In addition, the government’s choice for the two new directors of the Central Bank raised concerns about the composition of the monetary authority over the next few years, especially with regard to the conduct of monetary policy.

Leonardo Martins, co-CEO; Pedro Hokama, head of equities; and Thiago Campos, economist.