Latin America Economic Research

Research evidence excerpt

Latin America Economic Research

Cassiana Fernandez (55-11) 4950-3369 Mirella Sampaio (55-11) 4950-3289 Latin America Economic Research J P M O R G A Ncassiana.fernandez@jpmorgan.com mirella.sampaio@jpmorgan.com

Banco J.P. Morgan S.A. Banco J.P. Morgan S.A. 26 June 2026

Vinicius Moreira (55-11) 4950-3195 Gustavo Ribeiro (55-11) 4950-4059

vinicius.moreira@jpmorgan.com gustavo.ribeiro@jpmorgan.com

Banco J.P. Morgan S.A. Banco J.P. Morgan S.A.

Figure 1: BCB's inflation projections CurrentBrazil

%oya. Forecasts in the shaded gray area monetary policy

horizon

• The BCB left the door open to continue cutting the 5.5

policy rate by 25bp, for now 5.0 2Q26

• But the data could cut short the central bank’s cali- 4.5

bration cycle

4.0

• The June CPI preview brought some more positive

news 3.5 1Q26

• Next week: the credit data, the CAGED report, and 3.0 2025 2026 2027 2028

the IP to assess the state of economic activity in 2Q Source: BCB and J.P. Morgan

Last week, the BCB’s explanation of the rationale behind the The incoming data still calls for caution in the near term.

25bp cut in the post-meeting statement left more questions While still seeing a deceleration throughout the year, as sup-

than answers. This week's intense communication schedule, ported by recent 2Q data, the BCB report recognized the

with the minutes of last week's meeting and the Quarterly upside surprises in economic growth by raising its headline

Monetary Policy Report, was an opportunity to bring more GDP growth projection from 1.6% to 2.0%, with private con-

clarity to the central bank’s reaction function going forward. sumption raised from 1.4% to 2.1%. This revision was based

on the upside surprise in 1Q GDP growth, as well as a better

What we took from the communication is that the BCB con-