Financial Market Projects Selic Rate Held at 13.75%

The financial market has shifted its projections for the upcoming Monetary Policy Committee meeting. The prevailing expectation now points to the Selic rate being held at 13.75% per year this Wednesday.

Data from Copom options traded on the B3 show a drastic change in investor sentiment. The implied probability of keeping interest rates at the current level reached 68.8% after the second round of the elections.

Analysts at Itaú Unibanco expect the committee to acknowledge that inflation expectations are drifting away from the target. The institution anticipates a statement focused on caution due to the adverse global scenario and domestic risks.

HSBC projects that the benchmark interest rate will remain unchanged for an extended period. The assessment is that the trajectory of public accounts under the new presidential term will be a deciding factor for future Central Bank decisions.

Uncertainty regarding public spending control is weighing on the projections of banks and brokerage firms. The market is seeking clarity on fiscal policy to adjust its bets on the interest rate cycle in Brazil.