Financial market rises to 5.30% inflation estimate in 2026 and projects smaller interest rate cut

The financial market again raised its average estimate for inflation in 2026, which rose to 5.30%. This is the fourteenth week in a row of increases.
Economists have also started to project a smaller interest rate cut this year and in the coming years (see below in this report).
The expectations are part of the "Focus Bulletin", released this Monday (15) by the Central Bank (BC), based on a survey carried out last week with more than 100 financial institutions.
The explanation is that the war in the Middle East has caused the price of oil to soar and, therefore, has the potential to put pressure on Brazilian inflation. (via increase in fuel prices).
With the peace agreement announced this Sunday (14) between the United States and Iran, oil has already shown a drop at the beginning of the week, operating at around US$84 per barrel.
➡ For 2026, the inflation estimate rose from 5.11% to 5.30%;
➡ For 2027, the expectation increased from 4.03% to 4.10%;
➡ For 2028, the forecast rose from 3.65% to 3.68%;
➡ For 2029, the estimate remained at 3.50%.
Since the beginning of 2025, with the adoption of the continuous target system, the objective has been to maintain inflation at 3%, with inflation being considered within the target if it varies between 1.50% and 4.50%.
Why does this matter? The higher the inflation, the lower the purchasing power of the population - especially among those receiving lower salaries. This is because prices rise, while salaries do not follow this increase.
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Interest cut
Even with an increase in the inflation projection this year and in the next, the financial market continued to project a fall in interest rates.
Currently, the rate is at 14.50% per year - after two cuts this year.
The market estimate for the Selic rate at the end of 2026, however, rose from 13.50% to 13.75% per year in the last week, including a smaller reduction in interest rates throughout this year.
For the end of 2027, the market projection went from 11.50% to 12% per year.
For the end of 2028, the analysts' estimate increased from 10% to 10.25% per year.
Economic activity
For the growth of the Gross Domestic Product (GDP) of 2026, the market estimate rose from 1.91% to 1.96%.
The official result of last year's GDP was an expansion of 2.3%, according to the official release of the Brazilian Institute of Geography and Statistics (IBGE).
➡ The Gross Domestic Product (GDP) is the sum of all goods and services produced in the country and serves to measure the performance of the economy.
For 2027, the GDP growth projection remained by 1.70%.
File image - Gross Domestic Product (GDP)
Fernando Brito/G1
Exchange rate
The financial market raised its estimate for the exchange rate at the end of this year from R$5.15 to R$5.20 per dollar.
For the end of 2027, the projection of bank economists rose from R$5.20 to R$5.25 per dollar.

Source: G1