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Brazil: Selic Cut, But Staying Restrictive

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Heteronomics represents a different kind of economics. We believe analysis should delve into the details of what is really going on, rather than using overly simplistic assumptions to quick-sell stories. Independence from myopic institutional pressures allows us to focus on the realities underlying your asset allocation decisions, without the conflicts of the old market structures. Heteronomics targets the themes driving UK asset prices, offering the benefits of depth, independence and ultimately price.

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Macroeconomics

<ul>
<li>Brazil’s Copom cut by 25bp to 14.25% as expected, but stressed de‑anchored inflation expectations and high uncertainty around the disinflation path.</li>
<li>Guidance points to cautious, data‑driven easing; further 25bp cuts are possible but vulnerable to pauses if BRL weakens or inflation rises.</li>
<li>Markets still see Selic high through 2027; fiscal risks and inflation expectations will drive how far and how fast rates can fall.</li>
</ul>


Brazil’s Copom cut by 25bp to 14.25% as expected, but stressed de‑anchored inflation expectations and high uncertainty around the disinflation path.
Guidance points to cautious, data‑driven easing; further 25bp cuts are possible but vulnerable to pauses if BRL weakens or inflation rises.
Markets still see Selic high through 2027; fiscal risks and inflation expectations will drive how far and how fast rates can fall.


Brazil: Cautious Cuts, Persistent Risks