The recent unanimous Copom decision to hold the Selic rate at 13.75% after five consecutive 25-basis-point cuts has anchored trader expectations for no change at the March 2027 meeting, with 58.5% implied probability. Elevated inflation expectations—now at 5.2% for 2026 and 4.8% for 2027 per the Focus survey—combined with post-election fiscal uncertainty and supply shocks have prompted the central bank to emphasize caution and maintain a restrictive stance. This shift has lifted odds of a 25-basis-point hike to 19.5% while keeping deeper cuts below 14%. Key upcoming catalysts include the December Copom meeting, October IPCA data due mid-November, and any fiscal policy signals that could alter the inflation trajectory versus the 3% target.