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Brazil central bank debated whether inflation risks were now neutral

BY Reuters | ECONOMIC | 05/13/25 07:12 AM EDT

BRASILIA, May 13 (Reuters) - Brazil's central bank said on Tuesday that it discussed whether the balance of risks to inflation remained slightly asymmetric, albeit less so than in the previous meeting, or whether it could already be considered neutral.

In the minutes of last week's decision, when it raised rates by 50 basis points to 14.75% and refrained from providing forward guidance, policymakers stressed that core inflation measures have remained above the value consistent with the 3% target achievement for months, "corroborating the interpretation that inflation is pressured by demand." (Reporting by Marcela Ayres)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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