Turim Insights

Important central bank decisions around the world, the continued strong performance of stocks, and surprises in the Brazilian labor market were among the highlights of this month’s Visão Turim webinar.

Switzerland stood out among its peers by initiating an interest rate cut cycle, thereby “opening the door” for other central banks in developed economies. On the other hand, the Bank of Japan raised interest rates for the first time in over a decade, ending the negative interest rate policy in place since 2016.

Among emerging economies, the Central Bank of Mexico deserves attention for starting its monetary adjustment cycle later than most of its peers, like Brazil, which continues to cut interest rates but reduced forward guidance to gain more flexibility in managing interest rates amid greater uncertainty.

Brazil’s Central Bank decision comes in the context of a tight labor market, with significant surprises in formal job creation during the first two months and wage pressures, alongside increased uncertainty regarding the external environment.

The Fed, meanwhile, kept interest rates steady once again but made significant revisions to its economic projections. Notably, despite a scenario of increased economic activity and higher short-term inflation, the median expectations for year-end interest rates remained unchanged. Despite the stability in interest rate projections for this year, upward revisions were observed for 2025, 2026, and the long term.

Despite interest rate volatility, the U.S. stock market continues to deliver positive performance, with slightly less concentrated contributions from big techs on the margin, especially amid improved performance from energy companies. In contrast, the local stock market faces a more challenging scenario. Much of the decline in the Ibovespa this year has been concentrated in some commodity-linked names, allowing long-only and long-bias equity funds to once again deliver positive alpha.

Participants in the webinar included Ana Carolina Carvalho, Co-CEO of Turim, Rodrigo L., Partner and Head of Research, João Felipe Bandeira de Mello, CFA, Portfolio Manager, and Thiago Campos, economist.