(Bloomberg) -- Brazilian markets rallied on Thursday as the central bank’s unanimous decision to raise interest rates — and a statement viewed as hawkish — signaled its commitment to getting inflation back to target.

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The real trimmed gains after climbing as much as 1.2% versus the dollar, and swap rates jumped, after central bank officials raised the benchmark rate by 25 basis points late Wednesday, just hours after the US Federal Reserve delivered its first cut in four years. While the decision was expected by economists and investors, the tone of the accompanying statement drove traders to price a faster pace in the next few meetings.

“The Brazilian real is performing according to higher carry, with the rather hawkish message from the BCB, benefiting from the lower rates in the US,” said Marco Oviedo, senior Latin America strategist at XP Investimentos.

Meanwhile, Brazil’s benchmark index for reversed gains after rising earlier in the session, amid increased global appetite for risk following the Fed’s easing. Raphael Figueredo, CEO and analyst at Eleven Financial, said investors are “recalibrating their positions because they understand that there is more room for Selic rate to rise due to the tougher tone in the statement.” Short-end swap rates increased by over 20 basis points.

In the statement, board members wrote that the risks to their inflation outlook are tilted to the upside and the scenario requires more restrictive monetary policy. The focus on the strength of the Brazilian economy and unanchored inflation expectations should lead markets to price in 50 basis point raises at the next meetings, analysts said.

Higher rates at home should provide a boost to the currency, as a wider rate differential with the US makes it more appealing to carry traders.

Annual inflation slowed from the top of the tolerance range to 4.24% in August, according to the national statistics institute — a drop that did little to relieve the pressure on central bankers to lift rates.

Brazil’s hawkish rate hike turns Latin America’s largest economy into an outlier, as other central banks across the region lower rates to bolster their weak economies. Chile, Peru, Mexico and Colombia have all eased their borrowing costs in recent weeks.