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Brazil central bank cuts rates for third straight meeting by 25 bps

BY Reuters | ECONOMIC | 06:08 PM EDT

BRASILIA, June 17 (Reuters) - Brazil's central bank on Wednesday cut interest rates by 25 basis points for a third straight meeting, extending an easing cycle that has run into headwinds from an oil price shock and rising inflation expectations.

The bank's rate-setting committee, called Copom, unanimously voted to lower its benchmark Selic rate to 14.25%, a level last seen in May 2025, in line with forecasts from 41 of 45 economists polled by Reuters. (Reporting by Marcela Ayres Editing by Brad Haynes)

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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.

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