A sharp boost in the central bank's inflation forecast - suggesting the rate hike cycle will continue - isn't enough to halt the big rally in Brazilian stocks, with the Bovespa's 3.2% gain today putting the index higher by nearly 15% over the last two weeks.
The central bank now sees inflation of 6.1% this year, 50 basis points higher than its previous estimate. The 2015 inflation forecast is lifted to 5.5% from 5.4%. Both guesses are well above the 4.5% inflation target. The benchmark Selic rate has been raised 350 bps since April to 10.75%, and watchers are calling for another 25-50 bps next week and maybe another boost in May.