Thinking about CPI and its impact on the Brazilian market

Seeing the latest CPI figures, I can't help but think about the impact on other markets, especially emerging markets, which still largely depend on the Fed's monetary policy. We see a clear picture in our own country, but what I'm looking at is a market like Brazil, where $EWZ is still hovering around 35.19. Even though they raised interest rates quite aggressively in previous rounds, if the Fed has to keep interest rates high for longer than expected, or if there are signs that they need to raise them again due to persistent inflation, assets that previously offered high yields might become less attractive. This is because the yield differential will decrease compared to the still-high risk.

The high CPI figures increase pressure on central banks worldwide. I think we need to be particularly careful about the direction of interest rates in major countries during this period. The fact that $ASML can maintain its level around 1733.48 suggests that investors still value the fundamentals of large technology companies with continued revenue growth. But for a market like $EWZ, which is more volatile, I will have to wait and see the inflation situation and the Fed's stance for a while longer before adjusting my portfolio or increasing my weighting.