LATAM Today

Economics Research 22 September 2026 | 8:50AM EDT

LATAM Today: September 22, 2026

BRAZIL Alberto Ramos | Goldman Sachs & Co. LLC Copom Minutes: Neutral Signaling; Data Dependent Mode The central bank published today the minutes from the Sept 16 Copom meeting. At Sergio Armella | that meeting, the Copom delivered another 25bp rate cut, driving the Selic to Goldman Sachs & Co. LLC 13.75%. Santiago Tellez | Bottom Line: The Copom minutes were broadly neutral. The Copom underscored that Goldman Sachs & Co. LLC there are increasing signs that a tight monetary stance is gradually transmitting to Panteleymon Semka economic activity, more pronounced in the most cyclical real activity components and in | non-earmarked credit (directed/earmarked credit continued to expand, though). Although Goldman Sachs & Co. LLC

monetary policy has been playing a decisive role in the disinflation process, inflation is still being driven by demand, requiring a restrictive/tight monetary policy stance (Copom will not react to the current supply-shocks but will calibrate policy to avoid second-round effects). The characterization of the labor market did not change: unemployment has remained near historical lows, but job growth has been decelerating. Average real income growth moderated at the margin, including in nominal terms, but is still outpacing labor productivity. The Copom reiterated that supply shocks have played a significant role in both the recent evolution of inflation and its expected trajectory and that it should not respond to the first-round effects of such shocks, though it is necessary to closely monitor potential second-round effects and to react decisively should those effects materialize. The Copom remains concerned with the unanchored inflation expectations. The Copom is closely monitoring the observed deanchoring of longer-term inflation expectations and has been discussing the possible causes of this movement in expectations. We expect Nov to be a live meeting for a follow-up Selic cut but at this juncture we see limited near-term policy room for additional significant accommodation given the above-target conditional inflation forecasts across the entire relevant horizon and unfavorable balance of risks (high oil prices, rising Dollar yields, El Niño). The next Copom meeting takes place after the presidential election: the external backdrop and market reaction to the outcome of the election will be key inputs for the next monetary policy decision(s).

On the external side the Copom comments that the continued lack of clarity about the consequences of the geopolitical tensions and their effects on commodity and input prices have led to changes in expectations regarding the conduct of monetary policy in major advanced economies.

Domestic economic activity maintained a trajectory of moderation, as expected, with the deceleration more pronounced amidst activities and demand components that are more sensitive to the economic cycle. The dynamics in non-earmarked bank

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credit are also consistent with a scenario of deceleration of economic activity amid a tight monetary policy (earmarked credit continues to expand to households and companies continue to expand).

The Copom repeated that unemployment has remained near historical lows, while job growth has been decelerating. Average real income growth moderated at the margin, including in nominal terms, but is still outpacing labor productivity.

The Copom noted that both headline and core inflation have moderated, with the year-over-year measures now tracking below the 4.5% upper-limit of the inflation target band. However, in recent prints producer price inflation accelerated for both consumer intermediate and final goods.

The Copom noted that inflation expectations remained above the target across all tenors. The Copom is closely monitoring the observed deanchoring of longer-term inflation expectations and has been discussing the possible causes of this movement in expectations.

The balance of risks for…