Inflation in Brazil exceeded expectations

According to the data of the Brazilian National Statistics Office, consumer prices increased by 10.06 percent on an annual basis. The median estimate of economists surveyed by Bloomberg was a 9.96% increase. Food prices were the items with the biggest increase, with 0.84 percent, and transportation, with 0.58 percent. The currency gained 0.3% against the real dollar after the data. CPI also increased by 0.73% on a monthly basis. The Central Bank of Brazil has carried out an aggressive rate hike of 725 basis points since March. This upward trend and the increase in living costs caused the economy to enter recession. Despite the slowdown in the economy, policymakers state that interest rate hikes will continue in February. The bank's analysts expect inflation to stay above the target until 2024. The inflation forecast for 2022 is 3.5 percent, and for 2023 it is 3.25 percent. Central Bank Governor Roberto Campos is expected to write a letter to the government explaining why inflation has exceeded the target.