Brazil Economics: Copom cuts the Selic rate by 25bps to 14.25% as expected

Research evidence excerpt

Brazil Economics: Copom cuts the Selic rate by 25bps to 14.25% as expected

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17 Jun 2026 19:44:55 ET │ 9 pages

Brazil Economics

Copom cuts the Selic rate by 25bps to 14.25% as expected

CITI'S TAKE

Leonardo Porto AC

Copom reduced the monetary policy rate by 25bps to 14.25%, confirming +55-11-4009-2947

expectations. Overall, Copom recognized a worse inflation outlook by leonardo.porto@citi.com

increasing its forecasts and adding upside risks to the outlook. We interpret

that Copom maintained the door open for the next meeting, though Paulo Lopes AC

elevated the bar for an additional cut, adding upside risk to our 13.75% Selic +55-11-4009-2714

rate forecast in 2026YE. paulo.lopes@citi.com

Thais Ortega ACCentral scenario & Balance of risks — Copom increased its CPI inflation forecasts

to 5.2% YoY (from 4.6% YoY) in 2026YE and to 3.7% YoY (from 3.5% YoY) in 4Q27, the +55-11-4009-3412

relevant horizon for monetary policy. In both cases, the forecast departure is further thais.ortega@citi.com

from the 3.0% target and was in line with our expectations. Besides highlighting that AC Ivan Riveros,CFACPI inflation is as of May-26 running above the target already (4.7% YoY), Copom not

only maintained all the risks mentioned in the previous commuqué, but also added +1-212-723-0865

climate impacts over agriculture and energy and stimuli to aggregate demand as ivan.riveros@citi.com

upside risks to the inflation outlook.

Communication — Copom affirmed that “the total magnitude of the calibration

cycle will be established in light of new information aiming to assure inflation

conversion to the target”, highlighting that “the degree of restriction accumulated by

monetary policy allows different trajectories of the policy rate consistent with