At a time when inflation remains persistently high, the Central Bank of Brazil raised interest rates by 50 basis points to 14.75%, reaching the highest point in nearly 20 years.

The Central Bank of Brazil decided to raise the benchmark interest rate by 50 basis points to the highest level since 2006, as policymakers strive to contain high inflation while also noting the worsening global economic outlook. The Central Bank of Brazil raised rates to 14.75% on Wednesday, in line with market expectations. The Central Bank of Brazil slowed the pace of interest rate hikes as expected after three consecutive 1 percentage point increases. The Central Bank of Brazil has hiked interest rates by a total of 4.25 percentage points since September last year, as inflation is expected to remain above the 3% target level until the end of 2028. Rising prices for services and food have intensified inflation pressures, while a strong job market has supported consumer demand. However, President Trump's tariffs have clouded the global economic outlook, with the Central Bank of Brazil's survey showing economists have lowered their interest rate forecasts for the end of 2025. Goldman Sachs' chief economist for Latin America, Alberto Ramos, stated before the decision was announced: "The fight against inflation is far from over. Inflation is expected to remain well above the target level, so further monetary policy tightening is necessary."