Copom has paused its easing cycle. On Wednesday (4), the committee voted unanimously to keep the Selic rate at 13.75% a year, following five consecutive cuts. For retail investors, the pause keeps cash investments paying high yields, and contrary to what many expected, it is unlikely to make mortgage financing any cheaper.
Has the Selic stopped falling?
For now, yes, and the market had already priced that in. According to Money Times, in the final update before the meeting (Friday, July 30), B3's Copom options pointed to a 72.5% probability of a hold and a 26% chance of a 0.25 percentage point cut. A survey conducted by the same publication among 21 financial institutions showed a similar breakdown:
According to the survey, the institutions betting on a cut were XP Investimentos, BB Investimentos, Bradesco, Inter, and ASA. None of the 21 institutions predicted a rate hike at this meeting. The rate decision itself, therefore, came as no surprise. What did change was the tone of the accompanying statement, which offers clues about the central bank's next moves.
What changed in Copom's statement?
The committee's assessment of the external environment worsened. At its previous meeting, policymakers described the global backdrop as "uncertain" due to a lack of clarity surrounding geopolitical conflicts. Now, according to Money Times, Copom states that the environment has turned more adverse, driven by prolonged armed conflicts in the Middle East, upward pressure on oil and its derivatives, and tighter monetary policy in advanced economies.
"This scenario requires particular caution from emerging market economies in an environment marked by rising volatility in asset and commodity prices."Copom statement, as reported by Money Times
The statement also retained supply shocks related to oil derivatives and the impact of weather on agricultural productivity and energy costs among the upside risks to inflation. This logic explains the pause: more expensive oil drives up freight, fuel, and food costs, and the central bank is reluctant to cut interest rates until that pressure subsides. Nord Research raised this exact question in the headline of its video on the decision: what if inflation keeps rising? If it does, the pause could last longer than the market anticipates.
Is this the end of rate cuts or just a pause until December?
It remains unclear, and advisory firms are divided. Money Times points out that holding rates now does not necessarily rule out further cuts later in the year. Most expect the Selic to end 2026 where it stands, but some project one final cut in December at the final meeting of the year:
| Group of Institutions | November Outlook | Selic at Year-End 2026 |
|---|---|---|
| BofA, Safra, G5 Partners, and Tag Investimentos | Hold | 13.50% (0.25 pp cut in December) |
| Genial, Citi, BTG Pactual, C6 Bank, Santander, Itaú, JPMorgan, Goldman Sachs, HSBC, ARX, Morgan Stanley, and Warren | Hold | Current rate (no further cuts) |
| XP, BB Investimentos, Bradesco, Inter, and ASA | 0.25 pp cut | Not disclosed in the survey |
The division tilts in favor of those expecting a hold: 12 firms belong to the second group, compared to 4 in the first, among those that specified their year-end forecasts. However, the breakdown highlights how narrow the margin is. With the statement turning more hawkish and December still up in the air, upcoming inflation data will ultimately drive the decision at the final meeting. In our meeting preview, we noted that December was the key point of divergence. Our Selic tracker follows the rate and the date of the next meeting.
Why isn't mortgage financing getting cheaper?
Because the cost of real estate credit no longer depends directly on the Selic rate. According to InfoMoney, recent rate hikes by Bradesco, Itaú, and Santander had little to do with the benchmark rate and much more to do with the surge in future interest rates following the election. Consequently, the main practical takeaway from the decision is that most banks are unlikely to reverse the rate increases announced over the past few weeks in the near term.
Banks now look to the DI futures curve as their benchmark, a shift we covered in our report on the spike in DI rates during the first post-election week. Ronal Balena, CEO of MySide, told InfoMoney: "Mortgage financing reacted before the Selic fell because it serves, more or less, as a forward-looking indicator." Borrowers waiting for a Selic cut to finance a property may be waiting a while: credit pricing responds to market expectations for future interest rates, not just to Copom's rate decisions.
Cash and fixed income: The pause keeps high-yield liquidity attractive. MoneYou, cited by InfoMoney, ranks Brazil at the top of the global real interest rate list at 9.49%, ahead of Turkey and Argentina. Real estate funds (FIIs): This is our assessment, not the sources'. Prolonged high long-term interest rates continue to pressure FII unit prices, as fixed income remains a strong alternative and credit remains costly. Financing: Do not count on rate cuts in the near term.
What to watch going forward
The December meeting — This is the final meeting of the year. Four firms expect a 0.25 point cut, while the majority of those providing forecasts expect a hold.
Future interest rates (DI) — These drive the pricing of real estate credit and FIIs. As long as they remain elevated, the Selic pause offers no relief to borrowers.
Oil and the Middle East conflict — The statement kept oil and derivative supply shocks on the list of upside risks to inflation. This remains the primary factor that could delay rate cuts.
To understand the background of the meeting, it is worth rereading our analysis of Copom's first meeting following the presidential reelection, which anticipated the environment in which this decision was made.
Copom paused rates at 13.75% as widely expected, but a more cautious statement and a divided outlook for December indicate the easing cycle is not finished yet. Investors holding cash continue to earn strong yields, while those waiting for lower mortgage rates remain dependent on future interest rate curves rather than the Selic.