Overview
- Copom, which voted unanimously Wednesday, cut the benchmark Selic by 25 basis points to 14.50%, the rate banks use for overnight loans.
- The committee gave no forward guidance and said future decisions will hinge on new information about the Middle East war’s effects on the economy.
- Policymakers warned that headline and core inflation have risen and that expectations have drifted away from the 3% target.
- A weekly Focus survey now points to 2026 inflation of 4.80%, topping the 4.50% upper limit of the target range.
- The bank also flagged domestic fiscal policy as a risk because higher public spending can weaken markets and push borrowing costs higher.