Copom: Campos Neto’s vote splits old board and successors; understand why this is important | Economy

In that same window, only 34 meetings had differences in votes, including last Wednesday’s meeting. The survey was carried out by economist Bruno Imaizumi, from LCA Consultores.

This time, the divided votes carry an important message, which raises an alert in the financial market:

• 5 votes came from former directors, appointed in the past administration of the federal government;
• 4 votes came from new directors, appointed by the current president.

Galípolo and Pichetti stood alongside the new directors, all appointed by President Luiz Inácio Lula da Silva (PT), who voted for a reduction of 0.50 pp at this Wednesday’s meeting.

See below how the division turned out.

They voted for a reduction of 0.25 pp:

• Roberto de Oliveira Campos Neto (president);
• Carolina de Assis Barros;
• Diogo Abry Guillen;
• Otávio Ribeiro Damaso;
• and Renato Dias de Brito Gomes.

The votes for a reduction of 0.50 pp were cast by the following members:

• Ailton de Aquino Santos;
• Gabriel Muricca Galípolo;
• Paulo Picchetti;
• and Rodrigo Alves Teixeira.

Economists and market agents want a smooth transition at the Central Bank, but the division indicates that a change of direction may be close to happening.

Copom reduces Selic to 10.50% per year, a cut of 0.25 pp; see the analysis

According to experts interviewed by the g1the reading of the “split” at this Copom meeting is that new directors tend to opt for a looser conduct of monetary policy (in economists’ jargon, more “dovish”).

“The dissent says that this new Central Bank, which will enter, is more ‘dovish’, that we will have higher average inflation and lower interest rates in the economy”, stated the founding partner of Armor Capital Alfredo Menezes in a recent live broadcast from Warren Investments.

Lower interest rates could mean more impetus for economic activity, but also possibly inflation running at a higher level. It is a change of position in relation to the current management, which is generally more cautious when it comes to reducing interest rates due to fear of losing control over prices in the country.

Therefore, for Banco Master’s chief economist, Paulo Gala, the main news from this Copom meeting was precisely the composition of each side in this Wednesday’s vote. As the market was already pricing in a reduction in the rate of interest cuts, attention is now turning to what will happen to the future of the BC.

“The board did not even follow the forward guidance [estimativas dadas pelo próprio BC sobre o futuro da política monetária] which he had announced at the last meeting […] and, eventually, it already signals to the next BC that it may have its head turned towards lower interest rates”, said the economist.

The proximity of the change in command of the Central Bank should make internal divergences more common, but it could also mean greater difficulty for the next president in building consensus within the BC in 2025.

Another point that is in the sights of investors was the removal of the “forward guidance” in the statement released by the collegiate. Forward guidance is a type of estimate made by the BC about the future of monetary policy.

In other words, it is a way of providing predictability in the conduct of work and more comfort for decision-making for internal and external investors.

At the March meeting of the collegiate, the committee had reduced the Selic by 0.50 pp and indicated in the statement the possibility of a reduction of the “same magnitude” at this month’s meeting. But he decided to go against his own recommendation and cut 0.25 pp

According to CM Capital’s chief economist, Carla Argenta, the attempt to anchor inflation expectations based on a future signal did not work, causing the Copom to choose to remove any future signal from this Wednesday’s statement.

In the text, the panel made no mention of next steps, leaving the possibility of a change of scenario open. This adds more uncertainty about the future of the country’s interest rate trajectory.

“Without this signal about future conduct, the BC shows, once again, that it is quite divided about how monetary policy should be conducted.”, stated the economist.

Experts are now awaiting the Copom minutes, which should be released next Tuesday (14), and which tend to provide a more complete and in-depth analysis of the collegiate’s perceptions.