In a unanimous decision, the Monetary Policy Committee (Copom) of the Central Bank increased the economy's base interest rate, the Selic, by 0.25 percentage points on Wednesday, the 18th, from 14.75% to 15% per year. What were the reactions of market analysts?

Read below how the decision was received and what economists from different institutions consulted by Estadão/Broadcast project for the coming months in relation to monetary policy, which is trying to regain control of inflation , currently outside the ceiling of the target established by the government, the center of the target is 3% per year, with a margin of up to 4.5% (in 12 months, until May, the Broad National Consumer Price Index (IPCA) accumulated 5.32%).

‘Copom does not surprise because economy remains resilient’

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For Eduardo Velho, chief economist and partner at Equador Investimentos, Copom's decision to raise the basic interest rate by 0.25 percentage points, to 15% per year, is not surprising, as activity and employment indicators still show a resilient economy growing above its potential.

“Communication is relevant in the target regime. We believe that the last Copom minutes did not prepare, nor did they signal, that the increase in the Selic rate to 14.75% would have been the last of this restrictive cycle of monetary policy”, says the economist in a note sent to the editorial staff of Estadão/Broadcast.

Velho recalls that the Central Bank's Economic Activity Index (IBC-Br) grew 0.16% in April compared to March and that the economy has grown for three consecutive months.

This shows that the output gap (the level of production that the economy can achieve without generating inflationary pressures) remains positive, with actual Gross Domestic Product (GDP) growing above potential, in line with an unemployment rate below the natural rate (Nairu). “We estimate that this gap will remain positive until the beginning of the first quarter of 2026,” he says.

The economist also highlights that inflation expectations for 2026 and 2027 remain unanchored and that fiscal impulses have been gaining relevance in government decisions, even in an environment of frustration such as the increase in revenue, with measures blocked by Congress .

“We will have a primary deficit (negative balance between revenues and expenses, excluding debt interest), and the public debt tends to increase in the coming months, and we also estimate that the degree of inflationary persistence, as if it were structural inflation, would be running at around 4.6% per year, even higher than the 4.5% ceiling of the central target of 3%”, says the economist from Equador.

“It is a fact that the dollar has already returned half of the shock (exchange rate overshooting) from December, with a drop of around 10% in 2025, and prevented inflation from reaching a level above 6.5%. However, it should be remembered that the Copom's current decisions should not give relevance to the more favorable dynamics of the latest price indexes and the favorable seasonality of agricultural inflation between May and August, since the horizon of the Copom's interest rate decisions is targeting inflation in 2026, and not in 2025”, he concluded.

‘Copom’s decision and statement are slightly hawkish’

Copom's choice and statement were slightly more "hawkish" (tough), considering the market's division — between maintaining the interest rate at 14.75% per year or raising it to 15.00% per year — on what the decision would be, assesses economist Leonardo Costa, from ASA.

“The Central Bank raised the Selic rate to 15% at its June meeting, in line with our expectations and in the face of a divided market, closing the door to further increases and indicating that the basic rate will remain at a restrictive level for a very long period of time,” it said in a note.

Costa also highlights that the statement removed the weight of the risk arising from the trade war , while the authority continues to observe a slowdown in domestic activity, with a balanced risk balance.

Thus, ASA's expectation is that the Selic rate will remain at 15% per year until December 2025, when the BC should begin the monetary easing cycle, assesses the economist.

‘The BC made the right decision and the statement reinforces its commitment to fulfilling its mandate’

BGC Liquidez chief strategist Daniel Cunha praised Copom's decision and the content of the statement."The Central Bank made the right decision, delivering an interest rate increase accompanied by a statement that reinforces expectations of an independent monetary authority, committed to fulfilling its mandate," he said in a note.

Despite the plan to keep the Selic at the current level for a “very prolonged” period, monitoring accumulated effects not yet observed, “the Committee emphasized its vigilance, stating that future monetary policy decisions remain flexible and that it will not hesitate to resume the interest rate hike cycle, if necessary.”

In the strategist's view, Copom's signaling should increase confidence in Brazilian assets, particularly the real, “and support a flattening of the interest rate curve.”

‘Copom weighed down its bets on early Selic cuts in the curve’

The chief economist at Ativa Investimentos, Étore Sanchez, believes that the tone of the Copom statement was so harsh that it would justify an even more robust increase in the Selic rate than the 0.25 percentage point increase, to 15% per year.

“If the authority had not explicitly informed the indicator that the cycle of increases was interrupted, the text could have been interpreted as a signal that the cycle was continuing,” said Sanchez in a note. “The BC’s intention was clear: to overdo it in order to avoid scenarios of early interest rate cuts in the curve.”

Sanchez highlights, among the parts of the statement that he sees as the toughest, the section in which Copom states that it “will remain vigilant, that future steps in monetary policy may be adjusted and that it will not hesitate to continue the adjustment cycle if it deems it appropriate”.

The economist predicts that Copom will keep the Selic rate at 15% until the middle of next year. “With such austere communication, it is difficult to anticipate a downward cycle in interest rates,” says Sanchez. “We will remain vigilant about the Central Bank’s communication, which, despite being very tough at this meeting, interrupted the upward cycle,” he says.

‘We believe that Selic will remain stable until the end of 2025’

Banco Bmg's chief economist, Flávio Serrano, says in a note that, with tonight's signal from Copom, he expects that the Selic will probably remain stable until the end of 2025."We believed that the BC would keep the rate stable at 14.75% per year at this June meeting", points out the economist, referring to the increase of 0.25 percentage points, to 15% per year.

“Despite the increase, the prospective signal points to an interruption in the Selic rate hike cycle, if the expected scenario is confirmed between now and the next meeting,” adds Serrano. “The members now want to examine the accumulated impacts of the adjustment already made and, thus, assess whether the current level is sufficient to ensure inflation convergence to the target.”

He also notes that the committee, “as always,” emphasized in the statement that it will remain vigilant, and that the base interest rate may be adjusted if it deems it appropriate. Despite this caveat, “we believe that this move marked the end of the process of adjusting the base interest rate,” the economist emphasizes.