Itaú Asset Management and Legacy Capital forecast a 6.1% inflation rate by the end of 2025, with Itaú also predicting a Selic rate of 15.75%.

XP has similarly revised its estimates, expecting inflation to reach 6.1% and a Selic rate of 15.5% by the end of the tightening cycle.

Concerns about fiscal sustainability have led investors to anticipate an increase in the Selic rate, potentially exceeding the projected 14.25%.

Alexandre Bassoli from Apex attributes the worsening inflation to an overheated economy and the depreciation of the real, noting that Brazil's output is currently 4 percentage points above its potential.

Key drivers of inflation include an overheated labor market, faster wage growth than productivity, and expansionary fiscal policies, complicating monetary policy.

Marcelo Fonseca warns that rising debt financing costs due to high interest rates are exacerbating the country's debt burden and affecting risk perception.

To restore macroeconomic balance, measures to reduce mandatory expenses will be necessary, especially if the Selic rate approaches 16% by the end of 2026.

The Central Bank recently held a monetary policy meeting, but inflation expectations are worsening, with some anticipating the IPCA inflation rate to exceed 6% by December 2025.

The Central Bank's Focus survey indicates an increase in inflation forecasts, with the median IPCA projection for 2025 rising from 4.6% to 5%.

Juliano Cecílio from Adam Capital expects the IPCA to surpass 6% by year-end due to delayed price adjustments, despite an anticipated economic slowdown in the latter half of 2025.

He emphasized that even with tighter monetary policy, inflation is unlikely to decline quickly due to a significant lag in response.

Cecílio projects service inflation to end the year near 7%, industrial goods inflation to exceed 5%, and food inflation around 9%.