Will the Bank of Brazil decrease the target for the Selic rate by 25 bps at the September meeting?

Prediction markets put the probability at 90%: Will the Bank of Brazil decrease the target for the Selic rate by 25 bps at the September meeting. Currently, markets see this as likely (90% YES).

What’s Happening

Whether the Bank of Brazil will decrease the target for the Selic rate by 25 bps at the September meeting hinges on a monetary policy cycle that spent much of the prior year in restrictive territory. Brazil's central bank, through its Copom committee, held the benchmark Selic rate at 15% on 10 December 2025, marking the fourth consecutive meeting without a move as inflation stayed above target. Policymakers repeated hawkish language that policy should remain restrictive for a "very prolonged period," and economists who had penciled in a cut for January were left recalibrating their timelines after the hold. [WSJ, Dec 11]

The prospect that the Bank of Brazil will decrease the target for the Selic rate by 25 bps at the September meeting matters because it would signal the start of an easing pivot after a stretch of elevated borrowing costs. When Copom held at 15% on 10 December 2025, markets scanned the statement for hints that easing could begin, and Reuters reported that investors were frustrated by the absence of clear guidance. Brazilian equities reflected the uncertainty, with the Ibovespa steadying near 161,000 as Selic guidance, domestic politics and a Petrobras strike shaped the outlook for the B3 exchange. [TS2, Dec 14]

A quarter-point move would mirror actions elsewhere, underscoring why many expect the Bank of Brazil to decrease the target for the Selic rate by 25 bps at the September meeting. The U.S. Federal Reserve delivered a 25 basis point cut at its September 2025 meeting, and the Bank of Canada was widely projected to trim its overnight rate by a quarter point to 2.50% on September 17, with nearly 80% of polled economists backing the reduction. For Brazil, the next chapter depends on whether disinflation broadens enough to justify the first cut after a prolonged hold, with a 25 bps step the most conservative path. [Kitco, Sep 12]

Traded on Polymarket — $51K Volume

Lower-volume market on Polymarket ($51K). Wider spreads expected — enter with limit orders and be aware of slippage risk. Currently 90c YES.