NÃO IGNORE O ALERTA: A TAXA SELIC VAI SUBIR MUITO MAIS NO BRASIL

Rob Correa

24 Sept 202408:05

Summary

TLDRThe video discusses Brazil's high interest rates and the potential for further increases due to concerns raised by the Central Bank about the government's fiscal policy. The Central Bank highlights that Lula's administration's expansionist fiscal stance, marked by rising public spending, makes controlling inflation harder, possibly leading to higher interest rates. The video also emphasizes discrepancies in the accounting of public finances between the Central Bank and the Ministry of Finance, affecting market confidence. Lastly, it offers investment advice given the expected high interest rates until mid-2025, suggesting safe options like fixed-income funds.

Takeaways

📈 High interest rates in Brazil are not surprising, but the Central Bank warns that they could rise even higher if fiscal policy transparency is not improved.
🏛️ The Central Bank criticizes the expansionary fiscal policy of the Lula government, which increases public spending and stimulates the economy, leading to higher inflation and the need for higher interest rates.
💼 The Central Bank demands predictable rules and transparency in public accounts, highlighting a difference in accounting methods with the Ministry of Finance.
🔢 There is a significant discrepancy of over R$ 41 billion in the calculation of the public account deficit between the Central Bank and the Ministry of Finance.
💼 The discrepancy is influenced by factors such as R$ 6 billion in forgotten PIS and COFINS taxes that the Treasury counted as revenue, but the Central Bank did not.
💵 Another discrepancy arises from R$ 8.6 billion in forgotten money in bank accounts by Brazilians, which the Treasury will count as revenue, but the Central Bank will not.
🚫 The Central Bank is particularly critical of certain fiscal projects that attempt to circumvent budget constraints, such as a gas subsidy program and tax benefits for a shipbuilding project.
📉 The market distrusts the government's fiscal policy due to lack of transparency, which contributes to higher interest rates.
📅 The script provides a forecast for SELIC interest rates, expecting increases in November and December 2024, and further increases in January 2025, with a median forecast of 11.75% by the end of July 2025.
🏦金融机构如Itaú预测2025年初的SELIC利率将达到12%，显示出对利率进一步上升的预期。
💼 The script recommends investing in fixed-income securities such as Treasury bonds, post-fixed CDs, and post-fixed LCIs, and directs readers to the author's investment consultancy for personalized advice.

Q & A

Why is the interest rate high in Brazil?
-The high interest rate in Brazil is due to the government's expansionary fiscal policy, which increases public spending and stimulates the economy, leading to inflation. The Central Bank of Brazil has to raise interest rates to control this inflation.
What does the Central Bank of Brazil require from the government to avoid higher interest rates?
-The Central Bank of Brazil is asking for transparency in fiscal policy. They believe that without it, the government's expansionary fiscal policy will continue to put upward pressure on prices, necessitating even higher interest rates.
What is an expansionary fiscal policy?
-An expansionary fiscal policy is a government strategy that involves increasing public spending to stimulate economic growth. This typically results in a warmer economy and higher inflation, which can necessitate higher interest rates.
What is the difference between the Central Bank of Brazil and the Ministry of Finance in terms of accounting for public deficits?
-The Central Bank of Brazil and the Ministry of Finance have a discrepancy in how they account for public deficits. The Central Bank uses a more conservative method, not counting certain revenues like forgotten funds and PIS/PASEP that the Ministry does, leading to a difference of over R$ 41 billion in the last 12 months.
What is the significance of the discrepancy between the Central Bank and the Ministry of Finance's deficit figures?
-The discrepancy signifies a lack of transparency and trust in the government's fiscal reporting. It affects the market's confidence and can lead to higher interest rates as investors become more cautious.
What are some examples of the Ministry of Finance's actions that have raised concerns about transparency?
-Examples include attempts to increase gas subsidies through a triangulation involving Caixa Econômica to avoid budget constraints, and granting fiscal benefits for a ship tank project without proper countermeasures, which has been suspended.
What is the current market expectation for SELIC rates by the end of 2024?
-As of September 24th, the market expects future interest rates to rise to the highest level of the year. The median forecast for the SELIC rate by the end of 2024 is 11.25%, and it is expected to rise to 11.75% by January 2025.
What is the projected SELIC rate for 2025 according to the median forecast?
-The median forecast for the SELIC rate in 2025 is 11.75%, with a projected decrease only at the end of July 2025.
Which financial institution has a higher interest rate projection for 2025 compared to the median forecast?
-Itaú Unibanco has a higher projection for the SELIC rate, expecting it to start 2025 at 12%.
What are the recommended investment strategies by Hy Correa Research amidst rising interest rates?
-Hy Correa Research recommends investing in fixed-income securities such as Treasury SELIC bonds, post-fixed CDBs, post-fixed LCIs, and post-fixed fixed-income funds.
How can one get personalized investment advice as mentioned in the script?
-One can get personalized investment advice by clicking on the first link in the description or comments, which leads to the RC Wealth consultancy services, known for growing rapidly in Brazil.

Outlines

00:00

📈 High Interest Rates and Fiscal Policy in Brazil

The paragraph discusses the high interest rates in Brazil and the warning from the Central Bank about the potential for further increases if fiscal policy transparency is not improved. The Central Bank criticizes the expansionary fiscal policy of the Lula government, which increases public spending, stimulates the economy, and puts upward pressure on prices, necessitating higher interest rates. The paragraph also highlights a significant discrepancy of over R$ 41 billion in the accounting of public debt between the Central Bank and the Ministry of Finance. This discrepancy is influenced by factors such as unclaimed PIS and COFINS credits and unaccounted funds in bank accounts, which the Treasury counts as revenue but the Central Bank does not. The paragraph concludes with a discussion on market distrust due to the lack of transparency in fiscal policy, leading to higher interest rates, and mentions the future SELIC rate predictions for the end of 2024 and 2025.

05:00

📊 Interest Rate Forecasts and Investment Recommendations

This paragraph provides a forecast of interest rate hikes, with predictions for November 6th, December 11th, and January 29th, 2025, suggesting a gradual increase in SELIC rates. It emphasizes that these forecasts are median values, indicating a consensus among financial institutions. The speaker also mentions that some institutions, like Itaú, predict even higher interest rates. The paragraph concludes with investment recommendations from Hy Correa Research, suggesting fixed-income investments such as Treasury bonds, CDBs, and post-fixed LCIs and LCAs. The speaker invites viewers to consult their investment advisory service for personalized advice and mentions the benefits of their wealth planning services.

Mindmap

Keywords

💡Interest Rates

Interest rates are the cost of borrowing money and the reward for saving. In the context of the video, high interest rates in Brazil are a concern because they can affect the economy by making borrowing more expensive, which can slow down economic activity. The video discusses how the central bank may raise interest rates further if fiscal policy isn't transparent, which is directly related to the theme of economic management and its impact on the cost of borrowing.

💡Fiscal Policy

Fiscal policy refers to the government's strategy for managing its budget, including spending and taxation. The video mentions that the current government's fiscal policy is expansionary, meaning it is increasing public spending to stimulate the economy. However, this can lead to higher inflation, prompting the central bank to raise interest rates to control it.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. The video discusses how the central bank's task of controlling inflation is complicated by the government's expansionary fiscal policy, as increased spending can lead to higher inflation.

💡Central Bank

A central bank is the main monetary authority of a country, responsible for controlling the money supply and interest rates. In the video, the central bank of Brazil is highlighted as warning about the need for transparency in fiscal policy to prevent further increases in interest rates.

💡Transparency

Transparency in this context means clear and open communication about the government's financial policies and outcomes. The video emphasizes that the central bank is demanding transparency from the government to ensure that economic policies are predictable and可信.

💡Public Spending

Public spending refers to the government's expenditure on public services, infrastructure, and social programs. The video discusses how an expansionary fiscal policy, characterized by increased public spending, can overheat the economy and lead to higher inflation and interest rates.

💡Discrepancy

A discrepancy is a difference or inconsistency. The video points out a significant discrepancy between the figures reported by the central bank and the ministry of finance regarding the public deficit, which contributes to the lack of trust in the government's fiscal management.

💡Revenue

Revenue is the income generated by the government through taxes, fees, and other sources. The video mentions that certain funds, like forgotten worker contributions, are counted as revenue by the treasury but not by the central bank, contributing to the discrepancy in deficit figures.

💡Investment Recommendations

The video concludes with investment recommendations from the speaker, suggesting certain types of fixed-income investments as a hedge against rising interest rates. This advice is directly related to the video's theme of navigating economic uncertainty.

💡SELIC Rate

SELIC is the acronym for the System of Special Clearance and Custody of the Central Bank of Brazil, and it refers to the main interest rate set by the central bank. The video discusses the SELIC rate's future projections, which are a key concern for borrowers and investors in the Brazilian economy.

💡Fiscal Stimulus

Fiscal stimulus is a government policy that involves increasing spending or cutting taxes to boost economic activity. The video describes the government's expansionary fiscal policy as a stimulus that heats up the economy, which in turn requires the central bank to raise interest rates to control inflation.

Highlights

High interest rates in Brazil are not surprising, but warnings from the Central Bank suggest they could rise even higher if fiscal policy transparency is not improved.

The Central Bank criticizes the expansionary fiscal policy of the Lula government, which increases public spending and stimulates the economy, leading to higher inflation and the need for higher interest rates.

The Central Bank demands predictable rules and transparency in fiscal results, emphasizing the importance of these elements for economic stability.

The Central Bank is an independent institution, while the Ministry of Finance is not, highlighting a preliminary difference in their approaches.

There is a significant discrepancy in the accounting of public deficits between the Central Bank and the Ministry of Finance, with a difference of over R 41 billion reais in the last 12 months.

The Central Bank does not consider certain revenues, such as forgotten PIS and COFINS funds, as part of its deficit calculation, which is a point of contention.

Another discrepancy arises from the 'forgotten money' in bank accounts, with the Treasury planning to count it as revenue, while the Central Bank does not.

The market's distrust in the government's fiscal policy and lack of transparency is causing interest rates to rise.

Future interest rates have jumped to the highest level of the year, indicating a continued rise in borrowing costs.

Market expectations for SELIC interest rates are updated, with predictions for the end of 2024 and projections for 2025.

The median forecast of economists suggests a series of interest rate hikes in the coming months, with a peak in July 2025.

Itaú and other financial institutions predict even higher interest rates, with Itaú forecasting a SELIC rate of 12% at the start of 2025.

The recommendation from Hy Correa Research is to invest in fixed-income securities such as Treasury bonds, post-fixed CDs, and post-fixed LCIs.

The speaker offers investment consulting services through RC Wealth, focusing on investments in Brazil and abroad, as well as wealth planning.

RC Wealth is described as the fastest-growing investment consulting firm in Brazil.

The speaker invites the audience to learn about the benefits of RC Wealth's services by clicking a link for a consultation.