Brazil’s central bank, having raised the benchmark interest rate to 14.25%, may halt further rate hikes sooner than expected due to rising recession risks. If a recession materializes, 18-month inflation expectations may fall to around 3.5%, down from the current level of 3.7%. The central bank’s decision on whether to raise rates further will be influenced by evolving economic conditions, with uncertainty remaining high ahead of the May 7 monetary policy meeting.