The importance of strategic timing in a high interest rate environment.
- Scudieri
- Dec 3, 2024
- 2 min read
Fabiano Cordaro, a real estate business specialist, analyzes how the Selic rate and future interest rates influence financial and business decisions.
The current Brazilian economic scenario demands heightened attention from companies and investors. According to Fabiano Cordaro, a business specialist and partner at Scudieri Consultoria, understanding the movements of the future interest rate curve is essential for successful strategic decisions. He highlighted how these indicators, often underestimated, can anticipate trends even before changes in the Selic rate.
While the market expects a reduction in the Selic rate only in the second half of 2025, Cordaro points out that the true inflection points can be identified in advance through future interest rates, which are currently at historically high levels, similar to those recorded in the pre-impeachment period of former President Dilma Rousseff.
“Future interest rates are not just a reflection of the market, but a compass for strategic decisions. Knowing how to interpret these movements allows you to act at the right time, whether to invest, renegotiate debts, or plan financial restructurings,” explains the partner at Scudieri Consultoria.
Timing as a Competitive Advantage
Fabiano Cordaro also emphasizes that the future interest rate curve usually anticipates Selic rate movements by 6 to 9 months, creating a strategic window for companies and investors to position themselves more advantageously.
Historical examples reinforce this dynamic:
* 2016-2017 Cycle: Curve inversion 6 to 8 months before the first Selic rate cut.
* 2011-2012 Cycle: Signaling of change 8 months in advance.
* 2003-2004 Cycle: Anticipation of almost a year.
According to him, this historical pattern reinforces the importance of proactive actions. "This is the moment to structure investments, take advantage of favorable credit conditions, and plan financial restructurings that prepare companies for a more promising future," he states.
The Impact of the Cost of Money
The current high level of future interest rates reflects not only the government's demand for resources, but also the market's perception of risk and credibility. “We are at the highest point of the cost of money. The best decisions are not made when the curve has already turned, but before that, when the market still underestimates the potential for transformation,” analyzes Cordaro.
Companies that adjust their strategies before the inflection point gain a significant competitive advantage. “The turning point of an economic cycle brings both opportunities and risks. Being prepared to capture value at this moment of transition can be the difference between leading or simply following the changes,” he concludes.
*Fabiano Cordaro is a Real Estate Market Specialist, former Advisor, CEO and CFO of Construction and Development Companies: Tiner, Vitacon, Inloop, RSF, Dampris, Hacasa. Currently, he is a Partner and advisor at Smart Sharing and Ousy.Inc, and Scudieri & Associados.
About Scudieri Consultoria
Scudieri Consultoria is a leader in strategic management, mergers and acquisitions (M&A), and financial planning. With an innovative approach, the company stands out for transforming economic challenges into concrete growth opportunities, helping companies achieve their goals in complex scenarios.
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