More than today’s movements regarding interest rates, which are widely expected, investors will be attentive to the future guidance from monetary authorities.

The central banks of Brazil and the United States are set to announce their monetary policy decisions this Wednesday. Investors are eagerly awaiting signals about the next steps. While today’s movements regarding interest rates are widely expected, the primary focus will be on the future guidance provided by the monetary authorities.

In this context, the Brazilian Real is losing ground against the USD just before the decision, marking 5.01 units per dollar.

In the case of Brazil, the Central Bank (BC) is expected to announce a new 0.5 percentage point cut in the Selic rate, bringing it down to 10.75% per year. No surprises are anticipated in this decision. However, investors’ attention will be entirely on the official statement. The question is whether the Monetary Policy Committee (COPOM) will maintain the indication of further cuts—plural—at the same pace or if they will slow down to keep inflation under control in an economy that appears stronger than projected.

Regarding the United States, the scenario is more uncertain. It is widely expected that the benchmark rates will be kept within the range of 5.25% to 5.5% per year. However, the market awaits clearer signals from the Federal Reserve, the country’s central bank, regarding the start of interest rate cuts. These signals could come either in the decision statement or in the remarks from Fed Chairman Jerome Powell after the meeting. But the primary focus will be on the revised outlook presented in the “Summary of Economic Projections,” which is released quarterly.

In January, the so-called “dot plot” suggested, based on the FOMC median, that three rate cuts were the most likely scenario for this year. In this interpretation, if only two out of the six committee members change their opinion, the median could indicate either two or four cuts.