Brazil Markets End 2025 With Softer Inflation Bets as Real Hovers Near R$5.57

Overview

• The Central Bank’s Focus survey trimmed IPCA projections to 4.32% for 2025 and 4.05% for 2026, with GDP medians at 2.26% and 1.80%, and a year‑end 2026 Selic forecast held at 12.25%.
• The Copom kept the policy rate at 15% at the end of 2025, the highest since the mid‑2000s, even as surveys show inflation expectations easing.
• FGV’s IGP‑M ended 2025 down 1.05%, a deflation that eases cost pressures and directly affects contracts such as rents and utilities.
• In thin year‑end trading, the dollar touched R$5.58 and closed near R$5.57, the Ibovespa slipped, and futures showed short‑end rates up and long‑end yields slightly lower.
• Investors watch U.S. Fed minutes after a 25 bp cut to 3.50%–3.75%, while FGV’s industry confidence rose to 92.9 and analysts flag 2026 risks from China’s slowdown and potential AI‑linked market corrections.