Copom Cuts Selic to 14%

Overview

• The Copom voted unanimously on Wednesday to lower the Selic by 0.25 percentage point to 14.00%, the fourth straight quarterly cut and a total reduction of 1 percentage point since March.
• The committee left future moves open, saying the path of further cuts will depend on incoming inflation prints, longer‑term inflation expectations and other economic data in a higher‑uncertainty environment.
• The Copom revised its official IPCA forecasts to 5.1% for 2026, 3.8% for 2027, and 3.2% for the first quarter of 2028 and warned of upside risks from oil prices, climate effects and fiscal developments.
• Separately, the fixed portion of the BNDES TLP rose to 8.21% in August because it is mechanically tied to 5‑year NTN‑B real yields, which means long‑term credit for firms will become more expensive even as the Selic falls.
• Markets expected the 0.25 point cut, and policymakers stressed that easing is gradual; the decision balances support for activity with the need to contain inflationary pressures and the higher cost of long‑term financing.