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Brazil central bank signals rate-cut cycle but vows to keep policy tight

BY Reuters | ECONOMIC | 02/03/26 06:11 AM EST

BRASILIA, Feb 3 (Reuters) - Brazil's central bank said on Tuesday it found it appropriate to ?signal the start of ?an interest-rate easing cycle at ?its next meeting, ?but ?stressed the need to keep borrowing ?costs at ?restrictive levels until the slowdown in price pressures ?is firmly ?consolidated ?and expectations are aligned with the target.

In the minutes ?from its latest policy meeting, where it held the benchmark Selic rate at 15% ?for ?the fifth straight time, the bank said the ?size and length of the forthcoming rate-cut cycle will be defined as new data come in, ?allowing a more precise assessment of economic conditions. (Reporting by Marcela Ayres; ?Editing by Gabriel Araujo)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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