THE The Monetary Policy Committee (Copom) of the Central Bank (BC) released this Tuesday (5) the minutes of its last meeting., carried out last Wednesday (29), reinforcing the cautious scenario that underpinned the decision to reduce the basic interest rate, the Selic, by 0.25 percentage points, to 14.50% per year.
According to the document, the external environment remains uncertain, especially due to the unfolding conflicts in the Middle East, which have increased market volatility and impacted commodity prices. This scenario requires additional caution from emerging countries, the authority assessed.
Domestically, the Committee observed a gradual moderation in economic activity, as expected, although the labor market remains resilient, with unemployment at low levels and income on the rise. On the other hand, inflation has accelerated again in the most recent readings, moving further away from the target, while expectations for 2026 and 2027 remain above the objective.
The minutes also point to a further unanchoring of long-term inflation expectations, which, according to the Copom (Monetary Policy Committee), demands a more restrictive monetary policy for a prolonged period. The committee highlighted that this scenario increases the cost of disinflation for the economy.
Despite this, the Committee assessed that there is room for gradual adjustments in the pace of monetary policy, following evidence of a slowdown in activity. The decision to cut rates was considered compatible with the convergence of inflation to the target, although the Copom (Monetary Policy Committee) reinforces that the next steps will depend on the evolution of the economic scenario.