Goldman Sachs believes that higher-than-expected inflation in 1H July strengthens the view that Brazil's monetary-easing cycle is coming to a close. The investment bank still believes a half-point rate cut next month is "virtually certain," but "if inflation remains under pressure and activity starts to show clear signs that it is starting to rebound," that could be it. Goldman says another cut in October would only be prompted by weak activity and inflation safely under 5%; the mid-July rate was 5.24%.
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