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2h ago

Brazil Cuts Selic While U.S. Fed Raises Rates, Deepening Policy Split

The cut is set to lower mortgage costs and lift demand for property assets, with U.S. rate hikes increasing pressure on Brazil's inflation and capital flows.

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Overview

  • The Central Bank's Copom reduced the Selic by 0.25 percentage point to 13.75% on Wednesday, September 16, marking the start of a monetary easing cycle.
  • Market surveys in the Boletim Focus show median expectations for further gradual cuts to 12.00% in 2027 and 10.50% by the end of 2028.
  • A second consecutive monthly drop in the IBC-Br activity index for July, which fell 0.2%, strengthened policymakers' case for the September rate cut.
  • Analysts say lower policy rates will make mortgages cheaper, boost housing demand and raise the appeal of real-estate instruments such as CRIs and FIIs.
  • The U.S. Federal Reserve raised its policy range by 0.25 point to 3.75–4.00% in a unanimous vote, a move seen as politically salient under President Trump and one that heightens external risks for Brazil's inflation and capital flows.