WEEKLY REPORT We revise our 2026 Selic rate forecast from 14.00% to 13.75%
✅ The August Copom meeting kept the door open for further monetary easing but reinforced that future policy decisions will depend entirely on the evolution of the economic outlook. In our view, the overall message continues to leave room for further monetary easing by combining the recognition of gradually moderating economic activity and improving inflation dynamics with a cautious stance in light of still-unanchored inflation expectations and persistent external uncertainties. Against this backdrop, we believe the balance of risks is likely to evolve in a manner consistent with the continuation of the easing cycle. As a result, we revise our terminal Selic rate forecast for 2026 from 14.00% to 13.75%.
✅ In the United States, the week was marked by a series of indicators reinforcing the view that the labor market continues to lose momentum gradually. The ADP employment report surprised to the downside, with payrolls increasing by only 44k, reflecting weaker momentum across both the goods-producing and services sectors. Meanwhile, the nonfarm payrolls report delivered the week’s biggest surprise, showing a net loss of 23k jobs alongside sizeable downward revisions to previous months. In our assessment, the latest figures reduce the need for additional monetary policy action in the near term and reinforce our baseline scenario that the Federal Reserve will keep interest rates unchanged at its September meeting.
