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Inflation was the anomaly. Months later, so was deflation.

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The extreme

For a few weeks, the only conversation was about the price that would not behave. Every trip to the store seemed to confirm that inflation had slipped its leash again, and the official gauges only ratified what the street already felt. One of them printed the highest reading in a long time — a deviation the series itself barely recognized. In numbers: in February 2025, monthly IPCA registered 1.31%, with a z of 4.9 among the period's anomalies, under a Selic of 13.25% a year and the dollar at R$ 5.77.

What rhymes

Four months later, the ruler pointed the other way. In the year of euphoria under the rate of 15, with the Selic already at 15.0% a year and the dollar pulled back to R$ 5.55, a price index not only stopped rising — it collapsed. The IGP-M for June came in at −1.67%: a deflation the statistics flagged as an anomaly of magnitude comparable to February's inflation, now with the sign reversed, at a z of −4.09. A few months separated the peak of one gauge from the trough of another.

What didn't happen

The easy reading is of a country that swapped inflation for deflation in a matter of months. That is not what happened. In the same June that the IGP-M broke through the floor, the IPCA — the consumer's ruler — remained above zero, at 0.24%. There was never a single needle swinging from red to blue, but rather two distinct instruments pointing in opposite directions: the IGP-M carries wholesale prices and the exchange rate; the IPCA, the price that reaches the consumer. What looked like a turn in the economy was a divergence between rulers.

Honest verdict

The price ruler trembles more than the narrative told about it. "High inflation" and "low inflation" evoke a slow phenomenon, of months dragging on; up close, the indices leap between extremes of opposite sign within a single half-year — and do not always agree with one another in the same month. February recorded one of the series' largest upside deviations; June, one of its largest downside ones. Inflation and deflation are not seasons that follow one another: they are readings from instruments that tremble more than the whole country does.

Continue the story: Two years of high rates · The IGP-M, from one extreme to the other →

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Characters: Statistical anomaly · Rates (Selic)