During the week of “Super Wednesday,” the Fed is expected to cut interest rates in the United States. And in Brazil, what to expect from BC?

For Brazilians, unsurprisingly, it will be called “super Wednesday” due to the coincidence of the end of the meeting of the Fomc, the monetary policy committee of the Fed, and that of Copom, the Brazilian equivalent of the Central Bank (BC).

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The Fed summit, led by Jerome Powell, is expected to make another 0.25 percentage point cut in the interest rate this week, to a range between 3.5 and 3.75 percent, despite other directors’ growing discomfort with continued high inflation.

The Fed carried out a second consecutive reduction in October, motivated by the sudden deterioration of the American labor market during the summer in the Northern Hemisphere. But this was followed by a wave of worry warmonger (more restrictive) of some directors, including five with voting rights this year, signaling hesitation or resistance to support a third reduction in December.

This growing divide was exacerbated by the lack of new economic data due to the government shutdown that lasted much of October and November. The most recent inflation data available to E.A. economic policymakers, released on December 5, refers to September – a report that is unlikely to change the debate over the decision.

In this context, and for about a week in mid-November, investors expressed serious doubts about the possibility of a further decline. But the climate of uncertainty dissipated on November 21, when New York Fed President John Williams – seen as strongly aligned with Powell – said he saw room for a reduction “in the near term”.

The market has received the signal and is now assigning a 90%+ chance of movement next week.

Economists consulted by the Bloomberg agency then expect the Fed to take a break before making two further reductions in 2026, in March and September. And a flood of new data is expected – as statistical agencies catch up close – help resolve the tension between the Fed’s objectives: containing inflation and maximizing employment.

That said, further turbulence is on the horizon within the Fed. President Donald Trump is expected to soon name a successor to Powell, whose term expires in May.

Kevin Hasset, Trump ally and senior economic adviser, is the favorite. That has raised fears among some investors that the next Fed chair could continue Trump’s rate cuts and risk reigniting inflation.

Market figures from the Central Bank of Brazil could show further improvement in inflation expectations for this year and next, ahead of the November consumer price report, which will be released on Wednesday, and the interest rate decision, which will also be released on the same day, around 6:30 p.m.

Last month’s inflation will likely have slowed for the second month in a row and could fall below the 4.5% cap, although it remains well above the 3% target.

Hours later, it is virtually certain that Brazil’s central bank will do nothing more than keep the rate at 15% for the fourth consecutive meeting, but it is far more likely that President Gabriel Galípolo and his colleagues will offer substantive guidance.