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The inflation that had not yet reached the table — the IGP-M at 3 sigma in September 2020

Episode

The extreme

Two domestic gauges fell hand in hand, and a third refused to follow. Mood and local allocation pulled back to the floor of the scale; the structure of sectors, measured from the outside, barely moved and stayed in risk-on. But the piece that truly stood apart from everything was not in the fear — it was in an inflation index that shot up more than three deviations above its mean, while the price on the consumer's table stayed mild. It was wholesale inflation, of indexed contracts, of imported inputs: the fingerprint of a weak real before it reached the retail shelf. In numbers: Ânima from 35.2 to 26.2, the Perene Risk Index from 46.2 to 6.4, the IGP-M at 4.34% for the month (z of 3.16), the IPCA at just 0.64%, the dollar at R$5.40, and the Selic still at 2.0% per year.

What happened next

The signal did not collect its due right away — it collected it nearly a year late. Before inflation bit, euphoria came: in December 2020 the three gauges stopped disagreeing, with the Perene Risk Index leaping from 58.4 to 95.7 and Ânima nailing extreme optimism. September's divergence resolved upward, not downward. Only then did the wholesale reach the table: the Selic, parked at 2.0%, began to rise in March 2021 and reached 6.25% per year in September 2021, with the monthly IPCA already at 1.16%. And the currency refuge returned — commodities in reais surged again (z from 0.12 to 1.53), now with domestic mood in ruin, Ânima at 9.4.

What did not happen

The fall of the domestic gauges did not mean immediate contraction. Anyone who read the Perene Risk Index at 6.4 as "capital has already pulled back, there is no appetite left" would have missed December's euphoria. Nor did the IGP-M contaminate retail in the same month — the gap to the mild IPCA was precisely the signature of that. And the Selic did not react to the anomaly: it stayed nailed at 2.0% for another half year before the first tightening.

The honest verdict

September's signal got the nature of the pressure right — currency and wholesale, not heated demand — but it got the calendar completely wrong. A producer-inflation anomaly announces a vector, not a date. Between the tremor in the IGP-M and the rate cycle it foreshadowed, the market still crossed a peak of euphoria. Reading the regime is one thing; pinning down when it collects its due, another.

Continue reading: The money that fled inward · Mid-2021 — inflation returns · Commodities in reais →

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Characters: Statistical anomaly