FX.co ★ Brazil 10-Year Yield Edges Up After BCB and Fed Meetings

Brazil’s 10-year government bond yield inched up to 14.4% in June, following the latest interest rate decisions by Brazil’s central bank and the US Federal Reserve. The Monetary Policy Committee reduced the Selic rate by 0.25 percentage points to 14.25% per year, but signaled a longer horizon for returning inflation to target, keeping its next moves open as it assesses alternative interest rate paths. The Federal Reserve left its benchmark rate unchanged, but its projections were interpreted as more hawkish than expected, with roughly half of Federal Open Market Committee members anticipating at least one rate increase this year. Upward pressure on yields was partly offset by a decline in oil prices after the US-Iran agreement aimed at ending the conflict and reopening the Strait of Hormuz. Oil prices fell to their lowest levels since the conflict began, easing concerns about energy-driven inflation.