The Selic at 15% and the fading euphoria

Derivative

The extreme

All of the 2025 fever played out against the same backdrop: domestic rates at the top of the cycle. In July 2025, when market mood plunged from 92.3 to 39.0, the Selic stood at 15.0% a year and the dollar at R$ 5.53. This is no detail of the frame. With fixed income paying close to 15% nominal, the opportunity cost of staying long risk was too high for any surface enthusiasm to hold without confirmation. The euphoria rose; the rate, patient, collected.

What happened next

The rate at the ceiling worked in silence. In August 2025 it swallowed brick-and-mortar: IFIX/IBOV sank to z −2.12, because the asset that pays recurring income is the first to lose the contest against the risk-free rate. The Selic stayed pinned at 15.0% for months — it framed August, September, October, November, December and January 2026. The first cut came only in March 2026, to 14.75%, with that month's IPCA still high, at 0.88%. In May 2026 the rate eased to 14.5%, and mood capitulated to extreme pessimism (12.6) just as the structure was beginning to recover.

What didn't happen

The textbook narrative — "rates at the top knock down euphoria" — fails in the detail. The euphoria was not knocked down by the Selic: it visited extreme optimism again in August, September, November and January 2026, with the rate parked at 15%. The high rate did not extinguish mood; it merely guaranteed that it would not turn into broad flow. And the first cut did not bring obvious relief either — March 2026 reconciled the axes at a lukewarm point, not an optimistic one, with inflation still uncomfortable.

Honest verdict

The Selic at 15% was the patient adversary of 2025 — it never knocked down the euphoria all at once, but it kept it from meaning anything. The rate at the ceiling does not extinguish enthusiasm; it only collects the price of ignoring it, month after month.

Continue the story: The fever of 2025 · The first rate cut · What the Selic is →

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Characters: Rates (Selic) · Mood · Structure (intermarket)