Recent upward revisions to Brazil’s 2026 IPCA forecasts, now centered at 5.22% in the Focus survey and 5.6% in the Central Bank’s own projection, stem primarily from post-election fiscal concerns following President Lula’s October reelection and a series of supply shocks including higher oil prices, El Niño effects, and currency depreciation. These factors have unanchored inflation expectations above the 3% target, prompting Copom to pause its easing cycle and hold the Selic rate at 13.75% in November while noting elevated risks. Twelve-month inflation reached 4.58% in September, and the market-implied distribution—with 5.00-5.49% at 44.5% and 5.50-5.99% at 29.3%—aligns closely with this consensus amid ongoing uncertainty ahead of the December Copom meeting and final 2026 data releases.