# Brazil's Copom cuts Selic to 14.25%, but raises its inflation forecast
> A third straight quarter-point cut paired with a hawkish communiqué — election-year fiscal stimulus and El Niño flagged as upside risks

**Meta:** type: event · date: 2026-06-17 · heads: Whose Money, The Quiet Shift · 7 takes · 3 lenses · 3 regions

## Summary

[Banco Central Do Brasil](/en/entity/banco-central-do-brasil)'s rate-setting [[Copom]] on 17 June 2026 voted unanimously to
cut the benchmark Selic by 25 basis points to 14.25% — its third consecutive quarter-point
cut — while striking a hawkish tone. May annual inflation ran at 4.72%, above the ceiling,
and the bank raised its 2026 inflation projection to roughly 5.2% from 4.6%, flagging
election-year fiscal stimulus and a likely [El Niño](/en/n/el-nino-2026-advisory) as upside
risks. Governor [Gabriel Galipolo](/en/entity/gabriel-galipolo) cited Middle East supply shocks. The easing arrives as
[Lula](/en/entity/lula) runs for a fourth term (see [Lula leads Flávio Bolsonaro by double digits as the fourth-term campaign hardens](/en/n/lula-2026-reelection-poll-lead)) with the
fiscal framework under scrutiny — a still-restrictive real rate even after the cut.

## By the numbers

- 14.25% — new Selic policy rate, down 25bp.
- 3 — consecutive quarter-point cuts.
- 4.72% — May annual IPCA inflation, above the ceiling.
- ~5.2% — raised 2026 inflation forecast (from ~4.6%).

## Why it matters

Brazil holds one of the world's highest real policy rates; the pace of cuts shapes credit,
the real and the fiscal-debt path. A central bank easing while warning that the government's
own election-year spending could reignite inflation exposes the tension between monetary and
fiscal policy heading into the October vote.

## What to watch

- Whether the next Copom continues 25bp cuts or pauses on the raised forecast.
- Monthly IPCA prints and any El Niño-driven food-price spike.
- Fiscal-framework signals and election-year stimulus.

## Regional takes (batched by bias / lens)

### unlabelled
- **Banco Central do Brasil (Copom statements)** (Brazil, en) — Official index of Copom decisions and statements; the June 2026 statement records the unanimous 25bp cut to 14.25% and the raised 2026 inflation projection.
  Source: https://www.bcb.gov.br/en/monetarypolicy/copomstatements
- **Reuters (via Investing.com)** (Global, en) — 
  Source: https://www.investing.com/news/economy-news/brazil-central-bank-cuts-rates-for-third-straight-meeting-by-25-bps-4748642
- **MarketScreener** (Global, en) — 
  Source: https://www.marketscreener.com/news/brazil-central-bank-cuts-rates-for-third-straight-meeting-by-25-bps-ce7f5cddd88afe21
- **Rio Times** (Brazil, en) — 
  Source: https://www.riotimesonline.com/brazil-cuts-selic-14-25-copom-hawkish-communique-inflation-june-2026/
- **investingLive** (Global, en) — 
  Source: https://investinglive.com/centralbank/brazil-central-bank-cuts-rates-but-warns-fiscal-stimulus-may-blunt-monetary-policy-20260617/

### state newswire / record
- **Agência Brasil** (Brazil, pt) — Foregrounds the factual record: a third consecutive cut, but the committee stresses inflation remains above the ceiling amid global uncertainty, signalling a cautious, data-dependent pace rather than a clear easing cycle.
  > "The Copom reduced the Selic rate by 0.25 points, from 14.50% to 14.25% per year — the third consecutive cut — but stressed inflation remains above target."
  Source: https://agenciabrasil.ebc.com.br/economia/noticia/2026-06/copom-reduz-taxa-selic-para-1425-ao-ano

### regional / fiscal-skeptic
- **MercoPress** (Uruguay, en) — Reads the cut against the politics: easing into an election year while the bank itself warns that fiscal stimulus and a likely El Niño could reignite inflation — framing the move as monetary loosening at odds with the fiscal stance.
  > "Brazil softens its Selic rate, but concerns grow about fiscal stimulus in an election year and the impact of El Niño."
  Source: https://en.mercopress.com/2026/06/18/brazil-softens-selic-rate-but-concerns-grow-about-fiscal-stimulus-on-election-year-and-impact-of-el-nino

## Across the graph
- Related: [[lula-trump-tariff-standoff]], [[lula-2026-reelection-poll-lead]]
- Entities: Lula, Brazil, Banco Central Do Brasil, Gabriel Galipolo

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