Brazil Focus Survey: Inflation Expectations Ease, But “High-For-Longer” Rates Persist
Key Points
- 2026 inflation expectations edged lower again, staying inside the target band’s ceiling.
- The market still sees high interest rates through 2029, with a small uptick in longer-run projections.
- Growth forecasts stayed modest, and the exchange-rate path remained broadly unchanged.
Yesterday’s Central Bank Focus survey, published Monday, January 19, 2026, showed a small but clear easing in inflation expectations. The median forecast for 2026 IPCA inflation slipped to 4.02%, from 4.05% a week earlier.
Four weeks ago, it stood at 4.06%. That keeps expectations below the top of Brazil’s target tolerance band, which caps at 4.5%. Interest-rate expectations were steady near-term, but less comforting further out.
The median projection for the Selic rate at end-2026 held at 12.25%, even as the current policy rate sits at 15%. The 2027 Selic forecast also stayed at 10.50%.
For 2028, the median moved up to 10.00% from 9.88%, extending a recent upward drift. For 2029, the market kept 9.50%. Growth forecasts did not improve.
Economists kept the 2026 GDP growth median at 1.80%, unchanged for six straight weeks. The 2027 median also remained 1.80%. For 2028 and 2029, the median stayed at 2.00%.
Currency expectations were almost flat. The median year-end dollar forecast stayed at R$5.50 ($1) for both 2026 and 2027. For 2028, it was R$5.52 ($1). For 2029, the median rose to R$5.57 ($1).
Some secondary price gauges also suggested limited pressure. The 2026 IGP-M median was 3.92%. Administered prices were seen rising 3.75% in 2026.
Taken together, the survey reinforces a “slow disinflation, cautious easing” story. The near-term picture supports future cuts. The higher long-run Selic medians signal lingering skepticism about a quick return to low rates.
Related coverage: Brazil’s Morning Call | Foreign Trading Drove Brazil’s Stock Volume in 2025 as Local This is part of The Rio Times’ daily coverage of Latin American news and financial markets.
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Brazil — Live Market Board
+0.30%
175,664.62
+0.30%
65,484.32
-0.53%
11,445.90
-0.22%
2,979,472
-0.72%
2,457.87
-1.28%
60,779.49
-1.40%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 175,664.62 | +0.30% | +21.85% | 175,135.41 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
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