Brazil's central bank lowered its target rate by a quarter point to 14.25pc today in its fourth meeting of 2026, while ongoing uncertainty over the Mideast Gulf war continues to weigh on the outlook.
The decision to lower the rate, announced on Wednesday, followed similar 0.25pc cuts in March and April.
Domestically, economic activity appears to be recovering from the previous quarter, and the labor market shows signs of resilience, the central bank's monetary committee Copom said. Despite inflation risks continuing to be higher than usual, the committee decided to maintain its cutting trajectory, it said.
In the US, Federal Reserve policymakers kept the target rate unchanged Wednesday for a fourth meeting this year while penciling in a possible rate hike by the end of the year.
Brazil's headline inflation accelerated to an annual 4.72pc in May. Inflation expectations, as calculated by the bank's Focus survey, remain above target at 5.3pc for 2026 and 4.1pc for 2027.
Economic growth slowed to an annual 1.8pc in the first quarter, according to official statistics agency data. For full-year 2025, GDP growth slowed to 2.3pc from 3.4pc in 2024
