On Tuesday, Citi projected that rates would peak at 15.50% in June, following similar adjustments made by Itau, XP, and Santander.
Citi's analysts noted in a report that while they believe the majority of the currency depreciation is tied to fiscal policy, they still anticipate a response from the Brazilian central bank to the deteriorating inflation outlook, with any easing not expected until next year.
On Monday, Itau revised its Selic forecast to 15.75% by mid-year, an increase from 15%, and expects this rate to be maintained through 2025.
The bank cautioned that if there is another wave of currency depreciation or further declines in expectations, the tightening cycle could be prolonged, potentially delaying rate cuts until 2026.
Earlier this month, XP adjusted its Selic rate forecast to 15.50% for this year, highlighting the increasing challenges as inflation expectations move further away from the 3% target.
In December, Santander made a similar revision, predicting the Selic would conclude 2025 at 15.50%.
These revisions have been gaining traction since late last year, following the announcement of a fiscal control package by leftist President Luiz Inacio Lula da Silva's administration that fell short of market expectations, leading to currency depreciation and rising interest rate futures.
The negative trend continued despite the central bank's decision in December to expedite tightening with a 100 basis-point increase, indicating further hikes in the next two meetings, which would elevate rates from the current 12.25% to 14.25%, the highest level in over eight years.
Inflation concluded 2024 at 4.83%, exceeding the upper limit of its 4.5% tolerance band. Economists surveyed weekly by the central bank have consistently raised their forecasts, now predicting consumer prices to increase by 5.08% this year and 4.10% the following year.