In December, Brazil's central bank decided to hold its benchmark interest rate steady at 15.00%, emphasizing the importance of maintaining this level for an extended duration to ensure inflation continues on a stable path towards the target amidst prevailing uncertainty. Influences from the U.S. economic climate and global financial market volatility are impacting emerging markets, including Brazil. Domestically, although economic growth is slowing, the labor market remains robust, and inflation rates, while moderated, are still above the desired target. Inflation expectations are set at 4.4% for 2025 and 4.2% for 2026, with the Central Bank's Monetary Policy Committee (Copom) forecasting a reduction to 3.2% by the second quarter of 2027. Potential risks identified by the committee include the possibility of persistently high inflation in the services sector and a weaker exchange rate, contrasted by the risks of a sharper than expected economic slowdown or declining commodity prices. Holding the current rate for a prolonged period aligns with the strategy to direct inflation towards the target while mitigating economic fluctuations. Nevertheless, the committee indicated that future policy adjustments might be required should these risks transpire.