Brazil's economy was supposed to slow down by now. It hasn't, and the people who forecast rates keep raising their numbers.
Each Monday, Brazil's central bank surveys top economists. This week they raised their year-end call for the Selic rate to 13.5%.
That is up from 13.25% just a week before. They nudged the 2027 call up too, to 11.5%.
The Selic is Brazil's main interest rate. It already sits at 14.5%, near the highest in the world. That means a loan in Brazil costs about three times what it does in the U.S. Yet the economy keeps growing.
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Prices are still climbing fast. Yearly inflation hit 4.39% in April, up from 4.14% the month before. That keeps pushing the bank's target out of reach. It wants inflation near 3%, not the 4.4% it is now.
There is a politics angle as well. President Lula wants another term, with the vote set for October.
To win over families, he rolled out fuel help and a debt-relief plan. Those steps put more cash in people's hands.
More cash is good for voters, but bad for a bank trying to cool prices. An energy shock from the Iran war made the job harder still.
A rate this high is a heavy weight. It makes loans dear for shoppers and firms alike.
It can also press down on growth and on stocks. A key gauge of activity already fell 0.67% in March.
Savers do get one perk. Money parked in Brazil can earn a fat return while rates stay up.
The bank says it will move as the data moves. So far the data argues for going slow.
The bank cut rates twice this spring, down to 14.5%. Its next meeting lands in mid-June.
A 13.5% year-end call means only small cuts from here. So cheap money is not coming back soon.
High rates also pull cash toward Brazil. Global investors chase the fat returns its bonds pay.
That demand can lift the real, Brazil's currency. A stronger real makes imports cheaper, which helps cool prices.
For everyday Brazilians, though, the squeeze is real. Car loans and credit cards cost a lot more than they used to.
Stocks can feel the drag as well. When safe bonds pay this much, risky shares look less tempting.
Economists have raised their inflation call week after week. As long as that keeps up, deeper rate cuts stay off the table.
For now, loans stay costly and prices stay high. That is the price Brazil pays for an economy that won't slow down.
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