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Rates rose to the ceiling. The mood, higher still.

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The extreme

For nearly two years, borrowing money in Brazil cost more than it had in a long time. The obvious reading called for a retreating market — expensive money is the brake on any enthusiasm. That is not what the surface did. While the cost of capital settled at the ceiling and stayed there, the mood on the floor climbed to its highest point in many months, and only after touching it did it begin to descend. The brake was engaged; the car climbed the hill all the same.

For anyone living the market, the feeling was counterintuitive. Credit was expensive, the Treasury paid as it had not paid in years, and still the floor behaved as though none of it mattered — the pessimism one would expect from monetary tightening simply did not show up on the gauge.

In numbers: the Selic marked 14.25% a year at the end of the first quarter of 2025 and hit 15.0% by mid-year — and it was under that ceiling that the Ânima mood index closed June 2025 at 92.3, extreme optimism, the highest point in the series in months. Five years earlier, in the scare that accelerated everything, the same money had cost 3.75% a year — and the mood scraped the floor, at 2.6.

What rhymes

Set side by side, the two regimes reveal what neither shows on its own. At the end of the first quarter of 2025, with the Selic at the ceiling and the dollar at R$ 5.75, the mood had already leapt from 40.8 to 77.5 — and, at the same time, real estate funds took a beating: the IFIX/IBOV ratio slid from −0.63 to −1.14. Three months later the mood did not retreat; it rose from 84.7 to 92.3, the highest in many months, with the dollar at R$ 5.55 and the intermarket structure still in strong risk-off. A year on, with the dollar at R$ 5.23, bricks took another beating — the same IFIX/IBOV ratio at −1.81 — and commodities in reais crushed to a floor of −2.21 before drawing a first breath. The index did not fall under the ceiling; what thinned, month by month, were the relationships that needed carry to be worth it.

It was only in March 2026 that the cost of capital gave way: 14.75% a year, the first figure below 15.0% in many months. It came with no celebration. The mood barely moved, the appetite for the cycle cooled (Cyclical/Non-Cyclical from 0.78 to 0.36) and debt-to-GDP already marked 80.04%. The relief of a quarter point on the rate arrived lukewarm, like lifting a small weight from a load that remains heavy.

Now go back five years. In 2020, money cost 3.75% — cheap as rarely in the cycle — and the market collapsed all the same. The dollar hit R$ 4.8839, a statistical anomaly, and the mood fell to 2.6. Low rates did not buy a single buyer; high rates, half a decade later, did not scare off the euphoria. The ruler of the cost of money swung from one extreme to the other, and the market's direction did not obey it.

The easy reading

The easy reading says double-digit rates knock the market down. The archive does not support it. Under 14.25% and then 15.0%, the mood did not fall: it hit 92.3, the highest in many months, and returned to extreme optimism over the year. The mirror is more uncomfortable still — when money was cheapest, at 3.75%, it was the mood that touched bottom. If the price of money commanded the market's direction, the two episodes would have come out reversed.

What the cost of capital did, over those two years, was not to push down. It was to weigh. The intermarket structure spent months in strong risk-off — in June 2025, a score of 22.19 coexisting with a mood of 92.3 — and every relationship that depended on flow to rise rose against the current. The house's own accounting recorded the mismatch: September 2025, matured six months out, delivered 28.7% — a surprise above almost everything similar configurations had produced, in a period when the rate remained at the ceiling. High real rates do not push the market down; they only make each rise heavier, and each euphoria more suspect.

The question that remained

In March 2026 the ceiling finally gave way — 14.75%, the first cut below 15.0%. But the euphoria did not come running back, and the structure stayed defensive, with the Brazilian regime at 33.6. If two years of high rates worked as gravity, what does a market do when gravity begins, slowly, to loosen? The answer lives in the first cut — and in the last hike that preceded it.

Honest verdict

Rates rose to the ceiling and the mood rose higher still — not because the cost of capital was irrelevant, but because it does not act as a switch. It does not shut the market off; it only weighs it down. Between 2025 and 2026, under the most expensive money in years, Brazil recorded the sharpest euphoria in many months and watched bricks swallowed by carry — both at once, under the same number. The reading that gets it right is the one that separates direction from weight: high rates did not choose where the market went, but they charged a toll on every step toward risk.

And honesty asks for its limit. Placing 2020 — a scare of sanitary origin, the exchange rate in anomaly — against the 2025-2026 crossing explains less than it appears; they are regimes of distinct natures, joined here only by the contrast in the cost of money. What runs through both is not a law but a regularity: the price of money rarely commands the market's direction; it usually commands the weight.

Continue the story: The highest euphoria came under the highest rate · The first cut and the last hike · The carry that became gravity →

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Read also: Money has never been so expensive. The mood, never so high. · The tightening came with euphoria. The relief, in silence. · The carry stopped competing. It began to pull.

Characters: Rates (Selic) · Mood · Flow (risk appetite)