Brazil Copom Raises 2026 IPCA Forecast to 5.6%, Holds Selic at 13.75%

Brazil's Copom kept the Selic rate at 13.75% and raised its 2026 IPCA inflation projection to 5.6%, citing fiscal risks, high oil prices, and a depreciated exchange rate. The move signals a hawkish bias, with markets likely pricing in a prolonged tightening cycle or delayed cuts. The key uncertainty is whether fiscal policy will adjust to anchor inflation expectations.

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