Brazil's central bank on Tuesday stressed that cooling economic activity is crucial for bringing inflation to target, while labeling the unanchoring of inflation expectations and an overheating economy as "highly relevant" inflationary risks.

Brazil’s central bank said annual inflation will run above the tolerance range for the next six months, as food prices rise significantly and services costs remain elevated despite aggressive interest rate hikes.

Brazil’s central bank is likely to keep raising interest rates and take the Selic benchmark rate to 15% this year, according to the median forecast in the bank’s weekly survey of analysts.

Brazilian analysts say the tariffs announced by U.S. President Donald Trump against Canada, Mexico and China could cause a currency-related inflation surge in Latin America's largest economy, clouding the central bank's outlook for interest rates.