Turim Insights

The announcement of reciprocal tariffs, the growing risk of a recession in the U.S., and the non-linear slowdown of economic activity in Brazil were some of the main topics discussed in this month’s Visão Turim webinar.

In the United States, the sharp increase in the effective tariff on imports – expected to reach the highest level in over a hundred years – has put significant pressure on the U.S. stock market. Erratic communication on the topic has also substantially increased stock market volatility, pushing the VIX index (S&P 500 volatility) to test its highest level since February 2020.

The implications of rising tariffs for economic activity have also led the market to price in a greater number of expected cuts to the Fed Funds rate. Current market pricing reflects about 75 basis points of cuts by year-end, despite the inflationary effect of the tariffs. The shape of the implied inflation curve suggests that the market sees this impact as temporary – with inflationary pressure over the next twelve months, followed by a slowdown thereafter.

In Brazil, high-frequency activity data continue to support the thesis of a gradual economic slowdown. However, this process remains non-linear, as evidenced by Caged data, which recorded around 200,000 more jobs than projected for February.

This month’s webinar featured Leonardo Martins Moraes, Co-CEO of Turim, Henrique Santos, CFA, Portfolio Manager and partner at Turim, João Felipe Bandeira de Mello, CFA, Portfolio Manager at Turim, and Eduardo da Rocha Lopes, CFA, Liquid Assets Analyst at Turim.