The Interest Board
The Selic rate continues to be the main inflation control tool in Brazil. For 2026, the debate focuses on the level of "real interest" necessary to keep the IPCA within the target. With the convergence of inflation expectations, the Central Bank is signaling greater caution, avoiding sudden cuts that could reignite pressure on prices.
Impact on Credit and Consumption
High interest rates for a prolonged period tend to slow down family consumption and business investment. Sectors such as real estate and automotive, highly dependent on financing, are the first to feel the cooling. On the other hand, fixed income continues to offer attractive returns with low risk, draining liquidity from the stock market.
"The Copom's challenge is to calibrate the rate so that inflation falls without strangling GDP growth", explain macroeconomic experts.
What Should Investors Do?
In this cycle, selectivity is the watchword. Fixed-rate assets may be interesting if there is confidence in a future drop in interest rates, while floating-rate assets guarantee protection against inflationary or fiscal surprises that force the BC to keep the Selic rate high for longer.
- Prefixed: Opportunity to lock in high rates before they fall.
- Post-fixed: Security and liquidity for emergency reserves.
- Cyclical Sectors: Attention to retail and construction at times of cycle turn.