Brazil’s Central Bank Poised to Hold Selic at 15% Again as Debate Shifts to 2026 Cut Timing

Overview

• Today’s decision is widely expected to mark a fourth straight hold at 15%, the highest level since 2006.
• Market views diverge on the first cut, with surveys showing bets split between January and March 2026 and many calling for an initial 0.25 percentage point move.
• Officials are expected to stick to a data‑dependent approach and the notion of a “prolonged” restrictive phase, with analysts watching for any softening of the prior warning about resuming hikes.
• Recent data show easing inflation, marginal Q3 GDP growth of 0.1%, and unemployment down to 5.4%, while market forecasts for 2025–2028 inflation remain above the 3% target at about 4.40%, 4.16%, 3.8% and 3.5%.
• Analysts flag fiscal uncertainty and recent currency volatility, including a dollar uptick linked by traders to political developments, as risks that could influence the pace of easing.