In June, the yield on Brazil's 10-year government bond decreased to approximately 13.9%, nearing its lowest mark since December 2024. This decline follows a trend of easing inflation and changing interest rate expectations, which have collectively reduced term premiums. Specifically, the IPCA index for May registered at 5.32% year-on-year, significantly below expectations and reinforcing market predictions that the Brazilian central bank (Copom) will maintain its rate at 14.75%, thereby reducing market volatility. Despite adjustments by Finance Minister Haddad to the IOF decree and additional income tax measures, which have not fully allayed investor concerns about Brazil's long-term fiscal strategy, S&P's affirmation of the nation's "BB" credit rating with a stable outlook on June 6 served as a positive signal for credit markets. Externally, a slight decrease in US Treasury yields, sparked by reports of renewed diplomatic discussions between Iran and Israel, offered only marginal relief. With substantial bond issuance on the horizon and pension funds remaining cautious, Brazilian yields are expected to stay close to current levels until there is a decisive move toward fiscal consolidation.