Brazil’s Copom unanimously cut the Selic 25bp to 14.50% but offered no forward guidance, warning that future moves depend on the depth and duration of the Middle East conflict and that inflation projections are moving further from target.
Brazil’s Copom unanimously cut the Selic 25bp to 14.50% but offered no forward guidance, warning that future moves depend on the depth and duration of the Middle East conflict and that inflation projections are moving further from target. Summary: Copom cut the Selic rate by 25 basis points to 14.50% on Wednesday in a unanimous decision, matching the expectations of 31 of 35 economists in a Reuters poll The committee offered no forward guidance for a second consecutive meeting, saying future rate adjustments will incorporate new information on the depth and duration of the Middle East conflict Policymakers flagged deanchored inflation expectations, rising headline and core inflation, and projections moving further from the 3% target, reinforcing a stance of serenity and caution The easing cycle began in March with an initial 25bp cut from a nearly 20-year high of 15.00%, with the central bank citing an extremely restrictive policy stance as justification for the start of cuts The Focus survey’s 2026 IPCA projection has risen for six consecutive weeks to 4.80%, above the 4.50% target ceiling, driven by Iran war energy price pass-through The BRL has strengthened since March, supported by Brazil’s wide interest rate differential with advanced economies, helping contain imported inflation pressures Copom also flagged ongoing monitoring of domestic fiscal policy developments and their impact on financial assets and monetary conditions Brazil’s central bank cut its benchmark Selic rate by 25 basis points to 14.50% on Wednesday, delivering a second consecutive reduction since launching its easing cycle in March, but the accompanying statement made clear that policymakers see the path ahead as narrow, conditional and increasingly complicated by external forces.
The vote was unanimous across the rate-setting committee, known as Copom, and the outcome was in line with the expectations of the large majority of market economists. But the language surrounding the decision was…