FX.co ★ Ibovespa Falls on Hawkish Fed Outlook

The Ibovespa slipped 0.7% on Wednesday, closing at 168,454 points, as investors digested monetary policy decisions from both Brazil’s central bank (BCB) and the US Federal Reserve.

In Brazil, markets had broadly anticipated a 25-basis-point cut in the Selic rate to 14.25%, though some investors still saw room for a pause in light of a more challenging external environment, rising oil prices, and worsening inflation expectations.

In line with forecasts, the Federal Reserve kept its benchmark interest rate unchanged in the 3.50%–3.75% range but adopted a more hawkish tone. The signal that borrowing costs may stay higher for longer dampened risk appetite globally.

In the equity market, banks were mixed: Itaú gained 0.9%, while Bradesco slipped 0.6%. Utilities also weakened, with Axia falling 1.4%. Among heavyweights, Vale declined 2% on the back of lower iron ore prices, whereas WEG rose 2.3% after approving R$438.1 million in interest on equity.