LATAM Today: June 23, 2026

Research evidence excerpt

LATAM Today: June 23, 2026

Goldman Sachs LATAM Today

inflation converges to the target within the current relevant horizon, would require large

moves and abrupt changes in direction of the Selic rate [read hikes followed by cuts],

followed by several quarters of inflation below the target.

The Copom judged that, at this moment, Selic trajectories that are less divergent from

those in the Focus survey and market pricing are more appropriate, as they avoid

inducing excessive volatility in financial asset prices and macroeconomic aggregates,

with effects that could be counterproductive to the convergence of inflation to the

target. These strategies would combine moments of pause and resumption in the

calibration [cuts]; this would lead to milder output fluctuations and inflation

converging to the target in 2028Q1.

DETAILS:

The minutes reiterated the assessment of the baseline macro scenario unveiled in the

post-meeting statement. Specifically, the Copom stated that its updated baseline

scenario can be summarized as follows:

n The global environment remains uncertain “due to the lack of definition on the terms of

the agreement to end of the armed conflicts in the Middle East, and the consequences of

the already materialized effects of these conflicts”.

n On the domestic front, economic activity accelerated during 1Q26, with cyclical

sectors coming back to play a significant role, and the labor market is still showing

signs of resilience.

n In recent prints, headline and core inflation “accelerated, moving further away from the

inflation target” and surpassing the upper-limit of the inflation target band in the

latest inflation print.

n The conditional inflation forecasts deteriorated over the entire relevant horizon,

moving further away from the 3.0% target.