Recent May 2026 IPCA data showed inflation rising to 4.72% year-over-year, driven by elevated energy costs from geopolitical oil disruptions and firmer food and services prices, pushing Focus survey expectations for full-year 2026 modestly above the 4.0% range despite the central bank’s 3.0% target. The Banco Central do Brasil has begun a cautious easing cycle with 25-basis-point Selic cuts, yet persistent above-target readings and fiscal uncertainties have tempered optimism for faster disinflation. With trader consensus tightly balanced between the 5.00–5.49% and 5.50–5.99% buckets, positioning reflects uncertainty over whether global energy shocks and domestic demand pressures will keep the print near the upper end of the 4.5% tolerance band or allow convergence toward lower outcomes. Upcoming June Copom deliberations and June inflation data represent key near-term swing factors.