Brazil’s central bank reduced its key Selic rate by 50 bps to 13.25%, diverging from market predictions of a 25 bps cut. Despite a slowdown in annual inflation to 3.16% in June from 3.94% in May, rates remain above the target. The bank anticipates inflation rates at 4.9% for 2023, 3.4% for 2024, and 3.0% for 2025 and stated that the overall extent of the easing cycle will depend on future inflation trends.