Turim Insights
A monthly conversation with our team about markets and strategies
The Turim Insights webinar in October featured Fernando Verboonen, CIO at Turim, João Mello, Portfolio Manager at Turim, and Thiago Campos, Economist at Turim, in a discussion on the recent developments in the global economy and their impact on financial markets.
In the United States, the Federal Reserve resumed its interest rate cutting cycle, reducing the benchmark rate by 25 basis points (to a range between 4% and 4.25% p.a., as expected) and signaling two additional cuts by year-end. The decision reflected adjustments in the balance of risks amid a cooling labor market, even as the committee’s revised projections point to stronger growth and lower unemployment next year.
The interest rate market is currently pricing in more cuts than the FOMC members anticipate, with a terminal rate near 3% expected by the end of 2026. On the long end of the curve, however, the risk is that the monetary easing cycle may not be the dominant driver, potentially leading to a steeper yield curve.
Most global equity indices delivered positive performance in September, led by emerging markets, which rose around 7% during the month. In the United States, major indices also advanced, largely driven by technology stocks — well captured in the gains of the Nasdaq Composite (5.6%) and the Magnificent 7 (6.8%). Nevertheless, the continued appreciation of tech equities calls for caution, given potential signs of price excess.
In Brazil, the Real recorded another month of appreciation, in line with the performance of other peer currencies. Local equity indices also advanced in September, following the trend of global markets. On the other hand, the fixed income market moved in the opposite direction, reflecting the country’s specific dynamics — marked by significant fiscal uncertainty and new policy measures under discussion that may affect public accounts.