The BC (Central Bank) decided to reduce the Selic rate by 0.25 percentage points this Wednesday (17), to 14.25% per year, in line with the majority market expectations.
Analysts stated that the statement, however, reinforced a tone of caution and left the next steps of monetary policy open.
For Ouribank’s chief economist, Cristiane Quartaroli, the monetary authority did not leave a clear signal about the next steps “depending on the evolution of indicators from now on”.
According to the expert, the interval until the next meeting, scheduled for August 4th and 5th, increases uncertainty about the scenario.
The economist also highlighted that external factors, such as, could change the outlook for global and domestic inflation in the coming months.
“The main message is that we have a BC dependent on data to make the decision it will make in August,” he stated.
In the opinion of Carlos Lopes, economist at Banco BV, although the 0.25 point reduction was widely expected, the decision occurred despite an environment considered more challenging.
Lopes highlights that the BC recognized in the statement a more uncertain external scenario, resilient domestic economic activity and inflationary expectations that are still unmoored.
One of the most relevant points of the document, according to market reading, was the extension of the relevant horizon of monetary policy.
For the first time, the BC brought forward projections for the first quarter of 2028, indicating that, under current conditions, inflation would converge to the target in that period.
According to the BV economist, this change helped to justify the interest rate cut even in the face of the worsening of the balance of risks. Furthermore, the expert notes that the monetary authority has not signaled an imminent interruption of the monetary easing cycle.
“The next decision is open, but the statement seems to indicate a preference for continuing to reduce the Selic,” he stated.
Even so, the economist considers that the evolution of data until August could lead to a pause in the cycle. , although the likelihood of further cuts increased after the release of the statement.
Fiscal risk weighs again
Another important point, according to Inter’s chief economist, Rafaela Vitória, was the return of fiscal risk to the BC’s risk balance.
According to the economist, the statement signals concern about possible stimulus to demand, especially consumption, which could lead economic activity to grow above potential and reduce the effectiveness of monetary policy.
In the opinion of Sidney Lima, an analyst at Ouro Preto Investimentos, the cut confirms the strategy of gradual easing adopted by the Copom and was favored by the recent relief in the external scenario, especially the drop in oil prices.
However, Lima highlights that the space for further cuts remains limited due to inflation still above target and fiscal uncertainties.
Sicredi Asset assessed the Committee’s decision to remove the conflict in the Middle East as an explicit condition for the calibration of monetary policy as positive, focusing the analysis on domestic factors.
For the institution, details about alternative paths for interest rates should be clarified in the minutes and in next week’s Monetary Policy Report.
The manager also considers that this may have been the last interest cut of 2026, with the Selic remaining at 14.25% until the end of the year.
