Turim Insights

The September edition of the “Visão Turim” webinar featured Henrique Santos, CFA, partner and portfolio manager at Turim; João Felipe Bandeira de Mello, CFA, also a portfolio manager; and Eduardo da Rocha Lopes, CFA, liquid assets analyst. They discussed the effects of rising tariffs in the United States, the depreciation of the dollar, and signs of a slowdown in the Brazilian economy.

In the United States, the significant increase in tariff rates (now nearing 10% on July imports) remains in the spotlight, even leading to a jump in tax revenues. On the other hand, the impacts have yet to be strongly reflected in consumer inflation. Studies suggest that, at this initial stage, a large part of the tariff burden has been absorbed through a compression of American companies’ profit margins — a cost that may be passed on to consumers in the coming months.

The still moderate inflation — and, more importantly, signs of cooling in the labor market — enabled a major repricing in the U.S. interest rate market. Expectations now point to a resumption of the interest rate cut cycle as early as the September FOMC meeting, especially after a shift in tone by Federal Reserve Chair Jerome Powell during the Jackson Hole symposium.

This shift helped boost global equity markets in August, further supported by positive earnings surprises during the results season. In Brazil, stock market performance was also strong: the Ibovespa rose 6.3%, while the Small Caps index climbed 5.9%, more than offsetting the losses seen in the previous month — despite continued negative foreign investor flows.

Finally, the latest GDP reading confirmed the already anticipated slowdown in the Brazilian economy in the second quarter. Moreover, more timely indicators (such as confidence surveys and credit statistics) suggest this trend should continue into the second half of the year. The prospect of an economic slowdown, combined with the global backdrop, led the market to price in a more aggressive Selic rate cut cycle starting next year.