Brazil Selic call raised for 1st time since December

Bloomberg

Brazil economists raised their forecast for the benchmark interest rate at year-end following inflation surprises that reinforced the challenge facing Brazil’s prospective central bank chief to rein in prices.
Economists’ median forecast for the Selic at year-end rose to 12.88 percent from 12.75 percent the prior week, marking the first increase in the weekly Focus survey conducted May 27. They also raised their 2016 inflation forecast to 7.06 percent, marking the second-straight increase.
With inflation still more than double the official target, Brazil’s Senate will this week evaluate Ilan Goldfajn, who has been tapped to helm the central bank. Policy makers held rates unchanged last month and the market bets that, under Goldfajn, they could begin lowering rates as soon as July. Recent inflation data may dim that prospect.

Above Estimates
Brazil’s broadest measure of inflation accelerated in May more than all economists estimated, according to data that education and research institute Getulio Vargas Foundation released on its website on Monday. The data follows April and mid-May inflation readings as measured by the IPCA and IPCA-15 indexes that also exceeded all estimates.
Wholesale, consumer and construction prices, as measured by the FGV’s IGP-M index, rose 0.82 percent in May after a 0.33 percent advance in April. That result was above all estimates from 19 economists surveyed by Bloomberg, whose median forecast was for a 0.74 percent increase. The index, which is weighted 60 percent in wholesale prices, rose 11.09 percent in the past 12 months.
Brazil’s Senate decided to push up Goldfajn’s hearing based on a request from current bank president Alexandre Tombini, who said he prefers not to preside over the June 7-8 monetary policy meeting.