Analysis

The overwhelming consensus among analysts is that the Bank of Brazil is almost certain to cut the Selic rate in March 2026, with an asserted 99% probability from financial leaders like Bruno Furchal. Market expectations are aligned with this view, even though the debate centers on the size of the cut rather than its occurrence. Inflation levels are low, and unemployment is manageable, providing a conducive environment for rate reduction. However, geopolitical tensions might limit the size of the cut rather than the decision to cut itself. Given the strong signals and historical precedence of central banks acting on such foreshadowed decisions, the likelihood of no change in the Selic rate is minimal. The market's current odds reflect this understanding with an 80.2% chance of a rate decrease, suggesting that maintaining the current rate is improbable.