The FED pause, the Selic at 15%, and the economic scenario – Economic Analysis (02.20.2026)

We present the February edition of RADAR 4i. The current landscape calls for caution, with the US Federal Reserve maintaining its interest rate and the Central Bank of Brazil signaling future calibrations.

International Outlook: The FED in “Pause Mode”

• Interest Rates: In the US, the FOMC kept the policy rate unchanged within its 3.50%-3.75% target range.
• Expectations: Labor market resilience and inflation suggest the Fed will maintain a pause in the near term. Markets expect two 25-basis-point cuts in the second half of 2026, following Kevin Warsh’s appointment as Fed Chair.

Brazil Scenario: Selic, Retail, and Politics

• Selic Rate: Copom kept the Selic rate unchanged at 15.00%, but foresees the start of the monetary easing process at its next meeting, with cuts not expected to exceed 50 basis points.
• Economic Activity: Core retail sales volume fell 0.4% in December, but ended 2025 with a 1.6% consolidated growth. The services sector grew by 2.8% over the past year.
• Governability: President Lula enters his fourth year in office with the I-GOV index at 48.5%, indicating a broadly stable scenario despite political challenges.

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