Inflation is cooling, but the policy rate stays at 14%: what it means for 2026 rates and GDP

Intel Brief: The Focus report delivered a second straight downward revision for 2026 IPCA, pointing to easing inflation — yet the Selic rate remains fixed at 14% and GDP growth is still sluggish, disrupting expectations of quick cuts.

In real terms, “inflation down + no immediate rate move” reshapes the policy debate. Markets may gain room for a friendlier 2026 IPCA path, but weak activity keeps the argument for a more restrictive stance alive. For 2026, this divergence between inflation and the growth cycle can prolong elevated interest rates, directly affecting projections for GDP and risk pricing.

The Focus report, tracked by investors, once again revised its 2026 IPCA forecast downward — the second consecutive cut. However, the Selic rate remains unchanged at 14%, and GDP projections still fail to gain momentum.

What the data signals is a gradual improvement on the inflation front, without an immediate shortcut to monetary easing. While disinflation improves the inflation outlook, economic activity is not keeping pace, supporting the maintenance of high interest rates as an anchor. For 2026, the takeaway is straightforward: the IPCA trajectory may become more benign, but GDP expectations remain dependent on a more consistent recovery.