Focus Trims Brazil Inflation Outlook as Markets Position for Fed Cut and Copom Hold

Overview

• Brazil’s Boletim Focus lowered IPCA expectations to 4.40% for 2025 and 4.16% for 2026 and raised the 2025 GDP forecast to 2.25%.
• Futures assign roughly 90% probability to a 0.25 percentage‑point Fed cut on Dec. 10, with Powell’s tone expected to steer the outlook for 2026.
• Analysts widely expect Copom to keep the Selic at 15% this week, making the statement’s signals on the timing of cuts the key market driver.
• The dollar slipped 0.22% to R$5.42 and DI rates fell, but both moves only partially reversed Friday’s spike tied to Flávio Bolsonaro’s pre‑candidacy and his remark about a “price” to withdraw.
• Local assets still reflect a political risk premium as traders await Wednesday’s IPCA November print and central‑bank decisions in Brazil, the U.S. and Canada.