Brazil’s 10-year government bond yield was above 12.3%, rebounding from the six-week low of 12.1% touched on May 23rd, as higher inflation expectations strengthened bets that Brazil’s central bank could maintain high interest rates for a prolonged period. Mid-month inflation estimates were at 12.2% for May, above expectations of a 12% increase and the highest mid-month reading since 2003. The central bank raised interest rates for the ninth straight decision in May, setting the Selic rate at 12.75%, its highest level since February 2017. Analysts expect the Selic rate be set 50bps higher in the BCB’s next meeting, previously signaled by the central bank to be the end of its tightening cycle, although there is no consensus on the magnitude or pace that policymakers could reduce borrowing costs.
Historically, the Brazil Government Bond 10Y reached an all time high of 18.44 in November of 2008. Brazil Government Bond 10Y - data, forecasts, historical chart - was last updated on May of 2022.
The Brazil Government Bond 10Y is expected to trade at 12.58 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 13.53 in 12 months time.