Turim Insights

The announcement of Brazil’s fiscal package, global monetary policy, and prospects for the Trump administration were among the main topics discussed in this month’s Visão Turim webinar.

After weeks of discussions, the Brazilian government announced a spending cut package with an estimated impact of BRL 70 billion over the next two years. However, market analyses suggest that the actual savings may be lower, between BRL 40 billion and BRL 55 billion. The announcement was accompanied by a proposal to expand the income tax exemption bracket, overshadowing efforts to boost fiscal credibility. The result was another round of deterioration in local assets, with a sharp rise in interest rates and a depreciation of the real, which surpassed its historical high and is now trading above 6.00 USDBRL.

In the United States, the economy continues to show resilience, fueling discussions within the Federal Reserve and the market about a possible more gradual reduction in Fed Funds. Some members have indicated that rates may remain elevated for a longer period. In contrast, the Eurozone is experiencing a sharper slowdown, prompting the European Central Bank to consider accelerating its monetary easing cycle, including a potential 50-basis-point rate cut at the next meeting.

Meanwhile, in the U.S., President-elect Donald Trump announced part of his team and presented proposals that include imposing tariffs on Mexico, Canada, and China. Although it remains unclear how many of these policies will be effectively implemented, the market has reacted positively, with gains in stock markets and appreciation of the dollar.

The webinar featured Henrique Santos (CFA), Portfolio Manager and Partner at Turim, João Felipe Bandeira de Mello (CFA), Portfolio Manager, and Lucas Panaro, Head of Liquid Funds.