Brazil's Central Bank Reaffirms 3% Target as Policy Chief Says Next Move Is Cuts

Overview

• With inflation still above goal, the Copom has kept the Selic at 15%, and President Gabriel Galípolo said the bank has a legal duty to use rates to pursue a 3% target, adding he likely will not see it reached during his term.
• Monetary policy director Nilton David said further hikes are no longer in the probability set and that, if disinflation holds, cuts come next, while asserting the framework is working with no sign of fiscal dominance.
• Public remarks by Galípolo and David, along with supportive external signals, drove a firm drop in DI futures, with the January 2027 rate at 13.505%, January 2029 at 12.735% and January 2031 at 13.085%.
• Analysts say the December Copom statement and the upcoming IPCA‑15 will determine whether easing could begin in January or in March 2026.
• Galípolo urged senators to advance a constitutional amendment to grant the central bank greater administrative and financial autonomy.