PrintDeutsche Bank Says A 25bps Rate Hike at Brazil's Central Bank in Early 2026 Is Possible
BY MT Newswires | ECONOMIC | 06/23/25 12:27 PM EDT12:27 PM EDT, 06/23/2025 (MT Newswires) -- Deutsche Bank said it expects Brazil's central bank (BCB) to pause at least until year-end -- with a possible fine-tuning of 25bps.
The revenue rather than the spending route this government has favored pushed the market closer to pricing a final 25bp hike, but other than rounding the Selic to 15%, Deutsche Bank sees no discernible gain from such a hike.
The main source of uncertainty is for how long rates will be in contractionary territory, wrote the bank in a note. If Deutsche Bank uses BCB's models, the pause could extend for a year, but with so much variability in inputs and uncertainty, it believes COPOM could start at a
cautious 25bps around the turn of the year, with acceleration into the semester to make room for a possible pause in case volatility around elections surges.
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