Copom Pauses Rate Cuts and Keeps Selic at 13.75%

Overview

• The Copom held the Selic at 13.75% in a unanimous decision on Nov. 4, ending a sequence of five 0.25 percentage‑point cuts that began in March.
• The central bank raised its inflation projections, with the 2027 estimate moving up sharply and the policy‑relevant projection for the second quarter of 2028 rising to 3.5%.
• Officials cited faster inflation and a deterioration in inflation expectations together with external shocks such as higher oil prices and tighter global monetary policy as reasons for the pause.
• The decision surprised many market participants who had expected a 0.25pp cut and has shifted forecasts toward no further easing until at least early 2027 while Brazil remains among countries with very high real interest rates.
• The bank flagged a sharper economic slowdown and a labour market that is only slowly cooling, a mix that keeps credit costly for households and firms and makes the next Copom meeting on Dec. 8–9 a key test for whether cuts can resume.