Brazil’s 10-year government bond yield was steady around 15.29%, hovering near its highest level in a decade after the central bank (BCB) left the Selic rate unchanged at 13.75% at its November meeting. The decision reflected an outlook of weaker economic growth, higher inflation, and elevated uncertainty following President Lula’s reelection.
Markets remain focused on fiscal policy, especially the government’s willingness and ability to rein in spending and stabilize public debt, which has climbed sharply in recent years. Ahead of the meeting, expectations were split: some investors anticipated a pause, while others were pricing in a sixth straight 25 bps rate cut.
Policymakers pointed to rising inflation expectations, greater uncertainty, and a “more pronounced deceleration” in economic activity. The Copom statement underscored both the economic slowdown and the increased uncertainty surrounding its own projections. Labor market figures reinforced signs of cooling: Brazil generated 121,305 formal jobs in September, well below market forecasts of 171,000.