BRAZIL · INTEREST RATES
Key Facts
- The call. Goldman Sachs, a US investment bank, expects Brazil’s central bank to hold its rate at 13.75% until at least the second quarter of 2028.
- The reason. Inflation forecasts are rising even as the economy slows, which limits room to cut.
- The gap. Brazil’s own central bank survey sees the rate at 12.5% by the end of 2027.
- What next. Central bank minutes arrive Tuesday 10 November; the next rate decision is Wednesday 9 December.
- Prediction markets. Polymarket, a prediction market, gave no change 80.0% for the December meeting, with US$57,453 traded across December markets, as of 1:37 p.m. ET on 5 November.
- Power Index. Brazil ranks 1st of 14 in The Rio Times Latin America Power Index, with 74.2 points (November 2026 edition).
Anyone waiting for Brazil to cut interest rates may be waiting until the middle of 2028. Goldman Sachs, the US investment bank, now expects the central bank to leave its Selic rate at 13.75% until at least the second quarter of that year.
The call comes from Goldman economist Alberto Ramos, in a note written after the central bank held the Selic, Brazil’s benchmark rate, on Wednesday 4 November. It reaches an economy that is slowing yet still fighting prices above the official target, as our guide to Brazil’s economy explains.
For a US reader, the question is how long the Selic rate keeps paying so much. We covered the decision in our Big Read analysis and our pre-meeting preview.
In Plain English
Selic: Brazil’s benchmark interest rate.
Copom: the central bank committee that sets the Selic.
Focus survey: a weekly central bank poll of more than 100 economists.
What Did Goldman Sachs Say About Brazil’s Rate?
Ramos expects Copom to keep the Selic unchanged until at least the second quarter of 2028. He sees room for only limited cuts in 2028 itself.
His reason is an inflation outlook that has visibly worsened since the last meeting. Growth is cooling, but he says uncertainty over growth and over fiscal policy, meaning government spending and borrowing, makes any easing hard to judge.
Why Is Inflation Blocking the Cuts?
Copom said on 4 November that the global backdrop “became more adverse”, citing dearer oil and tighter policy in rich economies. It also raised its own inflation forecasts through 2028.
Economists in the central bank’s Focus survey expect inflation of 5.22% in 2026 and 4.76% in 2027, against a 3% target. Copom calls today’s Selic substantially contractionary, meaning it already squeezes growth.
XP, a Brazilian investment bank, already treats a hold through 2027 as its base case. Fabio Kanczuk, a former central bank director, calculates that inflation would fall to 3.1% in 2028 if the rate stays put.
How Far Is Goldman From the Market?
Goldman is more cautious than the crowd, and the Selic has stood at 13.75% since 16 September, down from 15% at the start of 2026. The latest Focus figures, dated 30 October, show a median of 12.5% at the end of 2027 and 11% at the end of 2028.
If Goldman is right, the market is pricing cuts that may arrive a year late. With 2027 inflation expected at 4.76%, a 13.75% rate offers a real return of about 8.6%, by our calculation.
At 1:30 p.m. ET on Thursday the real, Brazil’s currency, was near 5.49 per US dollar, 0.5% weaker. EWZ, the US-listed fund that tracks Brazilian stocks, stood at US$31.84, down 1.3%; we cannot tie either move to the note.
What Prediction Markets Say
Polymarket, a crypto-based prediction market where users bet real money, showed 80.0% for no change at the December meeting and 6.2% for a quarter-point cut. About US$57,453 had been traded across all December markets as of 1:37 p.m. ET on 5 November.
For January the same platform showed 55.5% for no change. These prices are bets, not polls or forecasts by the central bank.
Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.
What It Means for US Readers
The clearest winners are dollar investors who hold Brazilian government bonds or high-yield real deposits, because the pay stays high for longer. The clearest losers are Brazilian borrowers and rate-sensitive companies, which keep paying more for credit.
A weaker real can erase the extra yield for a dollar investor, so the currency matters as much as the rate. High rates also make Brazilian shares less attractive next to bonds.
What Is Not Known
Nobody knows whether Goldman’s forecast will hold, because it depends on inflation, growth and government budget choices. The central bank has given no signal on when cuts might resume.
Inflation readings drifting back toward 3% would bring cuts forward, while higher oil prices or a weaker real would push them back. The next decision, on Wednesday 9 December, would confirm the pause or end it, with the Focus survey on Monday 9 November and the committee minutes on Tuesday 10 November as earlier checkpoints.
Frequently Asked Questions
When will Brazil cut interest rates again?
Goldman Sachs expects no cut until at least the second quarter of 2028. The central bank’s Focus survey is more hopeful, with a median Selic of 12.5% at the end of 2027.
What is Brazil’s interest rate now?
The Selic is 13.75% a year after the central bank held it on 4 November 2026. It fell from 15% through five quarter-point cuts.
Sources: Banco Central do Brasil, Copom statement of 4 November 2026; Banco Central do Brasil, Focus survey (data to 30 October 2026); Goldman Sachs research note (4–5 November 2026); XP research; RT market data (5 November 2026, 1:30 p.m. ET); Polymarket (5 November 2026, 1:37 p.m. ET).
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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