Brazil Watch: Copom Minutes: higher for longer, no pivot

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Brazil Watch: Copom Minutes: higher for longer, no pivot

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Brazil Watch

Copom Minutes: higher for longer, no pivot

Hawkish tilt, pause now 23 June 2026

The minutes convey a more hawkish tone than the statement, despite delivering a cut. GEM Economics

The Copom explicitly flagged a deterioration in inflation dynamics and, importantly, LatAm | Brazil

introduced an explicit upside asymmetry in the balance of risks—absent from the David Beker >>

statement—strengthening the case for caution. At the same time, the Committee Bz Econ/FI & LatAm EQ Strategy

signaled preference for a gradual, “higher for longer” approach, avoiding disruptive Merrill+55 11Lynch2188 (Brazil)4371

policy shifts. We continue to expect the Selic at 14.25% through YE26, with limited david.beker@bofa.com

easing only from 2027. Natacha Perez

Brazil Economist

Asymmetric risks, gradual policy path Merrill+55 11Lynch2188 (Brazil)4127

natacha.perez@bofa.com

The inflation outlook worsened meaningfully. Near-term prints surprised to the upside,

while expectations became further de-anchored. The Copom revised its 4Q27 projection GustavoBrazil EconomistMendes

to 3.7% (from 3.5%), increasing the distance to target. Risks are now explicitly skewed Merrill Lynch (Brazil)

+55 11 2188 4493

to the upside, reflecting supply shocks (oil, climate/El Niño) and demand support that gustavo.mendes@bofa.com

weakens transmission, reinforcing a more conservative reaction function. The board

explicitly rejected scenarios requiring abrupt and large rate moves to bring inflation to

target—effectively ruling out a near-term hiking cycle. This signals no “hard pivot,” Copom - Monetary Policy Committee

despite the hawkish reassessment of inflation, and supports a smoother policy path.

BCB – Brazilian Central Bank