{"id":99003,"date":"2026-06-26T17:23:56","date_gmt":"2026-06-26T20:23:56","guid":{"rendered":"https:\/\/murray.adv.br\/?p=99003"},"modified":"2026-06-26T17:23:56","modified_gmt":"2026-06-26T20:23:56","slug":"central-bank-discussed-future-pause-in-rate-cuts-galipolo-says","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/central-bank-discussed-future-pause-in-rate-cuts-galipolo-says\/","title":{"rendered":"Central Bank discussed future pause in rate cuts, Gal\u00edpolo says"},"content":{"rendered":"
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Monetary Policy Committee rejected a pause last week, but considered scenarios in which it could interrupt and later resume the easing cycle<\/strong><\/em><\/h6>\n<\/div>\n<\/div>\n
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Brazil\u2019s Central Bank Monetary Policy Committee (Copom) discussed last week the possibility of pausing the interest-rate easing cycle at future meetings and then resuming it later.<\/p>\n<\/div>\n

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Central Bank Chair Gabriel Gal\u00edpolo disclosed the discussion on Thursday (25) during a press conference for the release of the Monetary Policy Report, putting on the table for the first time \u2014 even if over an uncertain horizon \u2014 the prospect of a temporary interruption in the monetary easing cycle that began only three months ago, in March. Gal\u00edpolo also made a \u201cmea culpa,\u201d acknowledging that the Copom statement contributed to market noise over the future path of the benchmark interest rate.<\/p>\n<\/div>\n

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Last week, Gal\u00edpolo said, Copom ruled out a pause and lowered the Selic by 25 basis points, to 14.25%. After that, the committee moved into a \u201cprospective\u201d discussion about the course of monetary policy. \u201cThere are scenarios we began to discuss prospectively, involving pauses at different points and resumptions at different points,\u201d he said.<\/p>\n<\/div>\n

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According to the Central Bank chair, that possibility is reflected in the Copom minutes released on Tuesday, when the committee said it had opted for Selic paths that were \u201cless divergent\u201d from those projected by the market.<\/p>\n<\/div>\n

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Even so, Gal\u00edpolo and interim Economic Policy Director Paulo Picchetti avoided giving a firmer signal on the next steps for monetary policy. Picchetti, who is also director of International Affairs and Corporate Risk Management, defended the need to preserve \u201cdegrees of freedom\u201d and said the calibration of the Selic will be adjusted as the scenario evolves.<\/p>\n<\/div>\n

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Asked about criticism from financial markets, Gal\u00edpolo said that in periods of greater uncertainty it is normal for investors to seek \u201cguidance\u201d on future policy. But he added that \u201cno central bank is adopting that policy in the world, and the literature does not recommend it.\u201d<\/p>\n<\/div>\n

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\u201cThere is, in this type of criticism, this confusion between being clearer in the statement and signaling what you are going to do. One thing cannot be confused with the other,\u201d he said.<\/p>\n<\/div>\n

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Communication noise<\/strong><\/p>\n<\/div>\n

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Gal\u00edpolo made a \u201cmea culpa,\u201d however, by acknowledging that the statement helped create noise in financial markets last week. He said the lack of clarity came from an \u201cexcess\u201d of information, rather than from a lack of transparency. According to him, the minutes sought to clear up those doubts.<\/p>\n<\/div>\n

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One source of noise was the balance of risks for inflation, updated with four factors pointing to upward pressure and three to downward pressure \u2014 but without making clear in the statement that the balance was asymmetric to the upside, something that was only spelled out in the minutes.<\/p>\n<\/div>\n

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In the balance of risks, the Central Bank provides a more qualitative assessment of factors that could push inflation above or below its projections. Gal\u00edpolo denied that the asymmetry requires a \u201cmechanical reaction\u201d from monetary policy.<\/p>\n<\/div>\n

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\u201cWe thought the 4-to-3 [in the balance of risks] was kind of obvious, that it was asymmetric. That does not establish any kind of mechanical reaction from a monetary-policy standpoint,\u201d he said. At another point in the press conference, however, the Central Bank chair said the balance can be classified as asymmetric regardless of the \u201ccount\u201d of upside or downside risks.<\/p>\n<\/div>\n

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Picchetti said part of the market\u2019s negative reaction to the statement reflected the lack of signaling on the next steps for monetary policy. \u201cThe Central Bank sees no present value in giving a signal in a scenario with so much uncertainty,\u201d he said.<\/p>\n<\/div>\n

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He acknowledged that the statement\u2019s unusually long text also made it harder to understand. \u201cThe paragraph in the Copom statement sought to summarize discussions, and we knew it would generate a strong reaction simply because it was very different from the usual statement,\u201d he said.<\/p>\n<\/div>\n

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Demand risks<\/strong><\/p>\n<\/div>\n

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The Central Bank included government measures to stimulate consumption among the risks that could put upward pressure on inflation. Picchetti said the composition of expected GDP growth this year has changed because of the outlook for stronger demand. The monetary authority raised its projection for household consumption in 2026 to 2.1% from 1.4%.<\/p>\n<\/div>\n

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\u201cThere are effects from income-tax reduction incentives and from the various measures that are already affecting disposable income, making this increase in household consumption possible,\u201d Picchetti said.<\/p>\n<\/div>\n

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In the Monetary Policy Report, the Central Bank raised to 79% the probability that the benchmark inflation index, the IPCA, will end 2026 above the target ceiling. For 2027, the probability is 28%.<\/p>\n<\/div>\n

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The Central Bank also raised its 12-month inflation forecast through the fourth quarter of 2027 to 3.7% from 3.3%. For 2026, inflation is expected at 5.2%, compared with 3.9% in the previous report, released in March.<\/p>\n

*By\u00a0Hamilton Ferrari\u00a0and\u00a0Giordanna Neves, Valor\u00a0\u2014 Bras\u00edlia<\/p>\n

Source: Valor International<\/p>\n

https:\/\/valorinternational.globo.com\/<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Monetary Policy Committee rejected a pause last week, but considered scenarios in which it could interrupt and later resume the easing cycle     06\/26\/2026 Brazil\u2019s Central Bank Monetary Policy Committee (Copom) discussed last week the possibility of pausing the interest-rate easing cycle at future meetings and then resuming it later. Central Bank Chair Gabriel […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[26995],"class_list":["post-99003","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-central-bank-discussed-future-pause-in-rate-cuts"],"yoast_head":"\nCentral Bank discussed future pause in rate cuts, Gal\u00edpolo says - Murray Advogados<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murray.adv.br\/en\/central-bank-discussed-future-pause-in-rate-cuts-galipolo-says\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Central Bank discussed future pause in rate cuts, Gal\u00edpolo says - Murray Advogados\" \/>\n<meta property=\"og:description\" content=\"Monetary Policy Committee rejected a pause last week, but considered scenarios in which it could interrupt and later resume the easing cycle     06\/26\/2026 Brazil\u2019s Central Bank Monetary Policy Committee (Copom) discussed last week the possibility of pausing the interest-rate easing cycle at future meetings and then resuming it later. 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