Key facts
- Brazil's central bank cut its benchmark Selic rate by 25 basis points to 14.25%.
- This marks the third consecutive meeting with a rate reduction.
- The decision was unanimous among the rate-setting committee members.
- Brazil's headline inflation accelerated to an annual 4.72% in May.
- Inflation expectations for 2027 were raised to 3.7% from 3.5%.
Brazil's central bank continued its monetary easing cycle by cutting its benchmark Selic rate by 25 basis points to 14.25% at its third consecutive meeting. The decision was unanimous, but policymakers acknowledged a worsening inflation outlook and raised forecasts, leaving future policy steps open amid risks from election-year fiscal stimulus. The bank raised its annual inflation forecast for the fourth quarter of 2027 to 3.7% from 3.5% and this year's projection to 5.2% from 4.6%. Annual inflation accelerated to 4.72% in May. Economists now forecast a total of 50 basis points of cuts in the next four meetings, bringing the Selic to 13.75% by the end of the year.