Goldman Sachs Projects Selic Rate at 13.75% Through Mid-2028

The Central Bank is expected to keep the Selic rate at 13.75% per year throughout 2027. This forecast extends the maintenance of current interest levels at least until the second quarter of 2028.

The assessment was released by the financial institution following the Monetary Policy Committee's unanimous decision to halt the interest rate reduction cycle. The analysis notes that deteriorating inflation outlooks prevent a return to rate cuts in the near term.

Fiscal uncertainty and economic growth weigh on the conduct of monetary policy. Even with signs of a more pronounced moderation in economic activity, the Central Bank remains cautious due to rising price projections.

Inflation estimates for the second quarter of 2028 rose from 3.1% to 3.5%. This shift moves the index further from the official 3% target and pressures the monetary authority to maintain a restrictive stance for an extended period.

Goldman Sachs notes that interest rate easing after 2028 will depend on the evolution of macroeconomic variables. The deterioration of projections for both free and administered prices remains the primary obstacle to easing Brazilian monetary policy.