Interest rate on special credit
The financial market is facing several difficulties in 2022, especially the domestic market, which does not seem to be one of the calmest, a situation that could have repercussions in 2023. Even with the advances related to the pandemic, some elements are necessary for the global economy to be able to breathe in the coming years.
In the US, the Federalista Reserve (FED) will start to reduce the pace of interest rate hikes. The Fed Funds were defined at a high 75 bps in the last meetings, but now the adjustment rate should be around 50 bps, being defined in the next meeting that will take place in December to end the year at 4.5% p.a.
In 2023, the next meetings aim to adjust to the end of the cycle. With the expectation that the Fed will end with Fed Funds rates at 5.25% p.a., leaving the interest rate hike at 50 and 25 bps, respectively, in the meetings that will take place in March 2023.
It is essential to close the cycle
It is essential, because from the moment the cycle ends, there will consequently be improvements in the relationship between the market and interest rates, obtaining better conditions for adapting to them. Consequently, asset volatility will be accommodated with slightly more adjusted intervals.
However, the US recession begins to subside and the soft landing environment becomes more likely. Projections show GDP in a rapid decline in the 2nd and 3rd quarters of 2023, however, in the annual summary, growth of 0.8% is expected.
In China, health restrictions against Covid are easing. The comings and goings of the Chinese government in relation to the policy against Covid zero, has generated several discussions. Recent news reveals that the country has invested in vaccinating capacity and expanding the number of ICUs available to the population, preparing for the reopening of the economy, which should take place after the Chinese New Year.
Without ceasing to stimulate other sectors to leverage the economy of the Asian country in 2023. If this occurs, China will obtain a growth of around 5.5%, according to the scenario, which may obséquio Brazil, due to the increase in commodity demand.
For this advantage in 2023, Brazil will be dependent on two fundamental points: the transitional PEC and the Economic Team. Other issues involve price flexibility and the measures taken by the new finance minister in relation to the definition for the country.