Opinion

Rising U.S. inflation a cause of concern for Brazilian markets

Brazil's stock exchange has broken records due to a weaker currency. But concerns in the U.S. could lead to extreme capital flight and the further devaluation of the Brazilian Real

Rising U.S. inflation a cause of concern for Brazilian markets
Image: Eames Bot/Shutterstock

U.S. inflation in April rose faster than expected. The core Personal Consumption Expenditures index (PCE) — the preferred measure of inflation for the U.S. Federal Reserve — increased by 0.7 percent last month, the highest jump since late in 2001. Looking on from the outside, Brazilian markets fear potential knock-on effects.

However, the reactions from the Fed and the Joe Biden administration suggest that a hike in prices is not necessarily a bad thing, as consumer price inflation has been at very low levels for years. Some say it is a direct result of the U.S.’s steady vaccination...

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