Rising US interest rates are yet another threat to Temer's post-Carnival period.
"Trump's announcement that he will increase military spending by 9% hinted that the Republican's budget cuts will not be as large as imagined, because the Defense Budget is one of the largest spending items in the US government and, even dismantling Obamacare, this process is expected to be slow," points out Fernando Brito, editor of Tijolaço, who predicts a rise in US interest rates, with a negative impact on Brazil.
By Fernando Brito, editor of brick
The US interest rate market closed yesterday – there is no Carnival holiday there – with a sharp increase.
Trump's announcement that he will increase military spending by 9% hinted that the Republican's budget cuts will not be as large as imagined, because the Defense Budget is one of the largest spending items in the US government and, even dismantling the... Obamacare, This process will be slow.
Just as important were the statements by Robert Kaplan, one of those entitled to vote in Federal Open Market Committee, The FOMC, a body of the Federal Reserve – their central bank – sets the interest rate on US Treasury bonds.
Kaplan commented on the possibility of raising interest rates at the next FOMC meeting on March 14 and 15, saying it is safer to raise rates beforehand than after the exact time.
Of course, a very strong increase is not expected, but it will still impact the financial market in Brazil, especially since the exchange rate is appreciated (the real is strong against the dollar) and there is little "fat" to burn.