Latin American Pulse for Thursday, September 17, 2026

On Wednesday, September 16, 2026, the United States Federal Reserve raised its policy rate by a quarter of a percentage point to a target range of 3.75-4%. This marked the first increase since 2023, with Chair Kevin Warsh stating that inflation remains too high and signaling more tightening ahead for investors.

Across Latin America, countries responded to the US rate hike in different ways. Brazil cut its own rate to 13.75%, the Selic benchmark interest rate, the fifth consecutive cut, leaving its next move open. Meanwhile, Petrobras raised the price of its refinery diesel by one real per liter, effective Thursday, September 17, with a thirty-day federal subsidy of the same size absorbing the increase. Drivers saw no immediate impact at the pump as the public purse covered the cost.

Chile, meanwhile, opened its national holiday on the same day, with President Kast inaugurating the Parque O’Higgins fondas with a paya and his first cueca in office. Argentina, however, took the sharpest market fall, with its Merval index closing 1.7% lower and Argentine shares in New York dropping as much as 5.2%. In Mexico, markets and banks were closed for Independence Day, with the peso weakening to 17.24 against the dollar in offshore trading.

Colombia's MSCI Colcap index led the region's declines, though the exact size of the fall could not be confirmed.

Despite the market volatility, there were some positive signs. Renault and Geely announced a two billion reais investment in their Ayrton Senna complex in São José dos Pinhais, Paranà , with plans for 5.8 billion reais in Brazilian spending for 2025-2027. In Chile, the Santiago market did not share the festive mood, with the MSCI IPSA index falling 0.77% on Wednesday.