Fed Eases Again as Brazil Holds at 15%, Underscoring a Split in Policy Paths

Overview

• The Federal Reserve cut the federal funds rate by 0.25 percentage point to 3.50%–3.75%, the third reduction of 2025, with a non‑unanimous vote as Austan Goolsbee and Jeffrey Schmid favored holding and Stephen Miran sought a 0.50‑point cut.
• Brazil’s Copom kept the Selic at 15% for a fourth straight meeting and said maintaining a significantly contractionary stance for a “bastante prolongado” period remains appropriate, giving no signal on when cuts might start.
• In its updated projections, the Central Bank of Brazil lowered the inflation estimate at the relevant policy horizon to 3.2%, while noting unanchored expectations and a resilient labor market.
• Monitoring by MoneYou and Lev Intelligence shows Brazil’s real interest rate near 9.44%, the world’s second highest behind Turkey.
• Following the Fed move, the Ibovespa rose 0.32% and the real weakened as the dollar reached R$5.47, with Copom also flagging external policy risks, including U.S. tariff announcements, and domestic fiscal developments.