You talk the talk; do you walk the walk?

BRAZIL ECONOMICS - Report 05 Nov 2026 by Alexandre Schwartsman, Cristina Pinotti and Diego Brandao

As expected, Copom unanimously decided to keep the target for the Selic rate at 13.75% per year. Consistent with the decision, there are several elements with a clearly more hawkish tone regarding the assessment of the situation.

At the same time, however, these elements are softened by the reference to a sharper slowdown in economic activity, with mention of the cooling of the labor market at the margin and, above all, by the addition of the expression “substantially contractionary Selic rate” in the final paragraph of the statement.

Anticipating our conclusion, the BCB signaled the end of the monetary easing cycle (or, if you prefer, the calibration cycle), that is, this is not merely a pause to be followed by a resumption further ahead. However, it gave no signs that it intends to resume raising the Selic rate anytime soon. In this sense, if there is any guidance regarding the next monetary policy steps, it does not seem to us entirely consistent with BCB’s own assessment.

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