Copom Minutes Signal Greater Confidence That a Prolonged 15% Selic Will Bring Inflation to Target

Overview

• The committee kept the Selic at 15% and says maintaining this level for a prolonged period should secure inflation convergence to the 3% target.
• A prior paragraph flagging risks from U.S. tariffs and domestic fiscal headlines was removed, indicating a more confident communication while retaining vigilance.
• Inflation projections were reaffirmed at 4.6% for 2025, 3.6% for 2026, and 3.3% in the second quarter of 2027, still above the target over the relevant horizon.
• A preliminary estimate of the expanded income-tax exemption’s inflation impact was incorporated into the outlook, which the committee labels highly uncertain.
• Recent readings show a more benign inflation dynamic helped by a stronger real and softer commodities, as activity moderates unevenly with slower credit and a resilient labor market.