BCCC Market Update: Could 2024 be the return of investments in risk assets?

Category: Blog

The Federal Reserve in the United States of America last year announced a pause on the rise of interest rates and intimated that rate cuts could begin in the second half of 2024. The Federal Reserve’s decision on future interest rate cuts has had ripple effects throughout global markets and influenced the policy decisions of central bankers around the globe. Even though the Central Bank in Brazil was ahead of the curve in their fight against inflation in Brazil, in comparison to their North American counterparts, the comments made by the Monetary Policy Committee (COPOM) in Brazil has consistently quoted a “volatile international environment and the debate on monetary policy easing in major economies” as their major concern affecting policy decisions in Brazil.

These concerns, which were shared among most Institutional Investors around the world, had created an unfavourable environment in investing in risky assets in Brazil and around global markets. Since Nubank’s Blockbuster $2.3 Billion (USD) IPO in December of 2021, the market for new issues in Brazil has been relatively slow.

Given the Federal Reserve pause and expectation for rate cuts, this momentum could open up markets for risk assets globally. The Brazilian Exchange (B3) is anticipating that more 100 companies will IPO in Brazil this year. These signs of life are providing optimism, which has largely been overshadowed by a pessimistic international environment.

Disclaimer: These views are the views of the Author and are not to be construed as Financial Advice. Anyone seeking Financial Advice should consult a Financial Professional before making any investment decisions based on this content.

WRITTEN BY: Michael Kennedy

SOURCE: Micheal Kennedy

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