Report published September 30, 2026
Two More Cuts on the Horizon: Brazil Rates Strategy by GlobalData TS Lombard
GlobalData TS Lombard · September 30, 2026
TS Lombard forecasts Banco Central do Brasil will cut the Selic rate by 25bps in both November and December, lowering it to 13.25% by yearend. The easing is warranted by slowing domestic GDP and record household delinquency, but persistent services inflation and upside fiscal risks preclude a faster cutting pace.
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Finvaulta summarizes GlobalData TS Lombard's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
Key Takeaways
- 1.Banco Central is projected to deliver two 25bps rate cuts in November and December, lowering the Selic rate to 13.25% by yearend.
- 2.Slowing domestic economic activity and rising household credit strain strengthen the case for monetary easing.
- 3.Sticky services inflation, elevated inflation expectations, and fiscal and geopolitical risks prevent an acceleration of the cutting cycle, keeping real rates above 8%.
Table of Contents
- High interest rates are increasingly taking a toll on household finances and credit conditions.
Report data
Chart 7: Rate cuts would leave monetary policy firmly in restrictive territory
| Metric | Estimate | Context |
|---|---|---|
| Selic Rate Target | 13.25% | Forecasted yearend policy rate following two 25bps cuts in November and December. |
| IPCA Inflation (12-month) | 4.47% | Mid-September headline inflation rate. |
| Yearend IPCA Inflation Forecast | 4.93% | Expected headline inflation at the end of the year. |
| Services Inflation (12-month) | 6.0% | Persistent services price inflation pushing 12-month rate to 6.0%. |
| Real GDP Growth | 0.5 % q/q | Quarterly GDP growth slowdown. |
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