Election Campaign and its Reflections on the Direction of Economic Policy

The start of video recordings for the 2026 election campaign marks the official starting point for the race that will define the country's legislative and fiscal directions in the coming years, with the direct involvement of ministers and government leaders in Brasília. This political movement occurs in an environment of intense party coordination, where the formation of factions aligned with the central government becomes the main strategic objective to unblock public interest agendas and contain the opposition in the National Congress. On the financial and exchange front, the commercial dollar is traded at R$ 5.1859, registering an upward variation of 1.58% over a 7-day window and accumulating a slight rise of 0.43% over a 30-day horizon, reflecting market nervousness in the face of the approaching election and fiscal uncertainties. Simultaneously, the benchmark interest rate, the Selic, remains at a contractionary level of 14.00% per year, stable in both the 7-day comparison and the monthly horizon, imposing a high cost of capital that conditions public and private investment planning. This coverage on the beginning of the electoral race represents the sixth mention of topics with institutional and political impact in our recent archives, consolidating a mostly negative panorama of regulatory noise and power struggles affecting the business environment. From the perspective of credit and liquidity cycles, anticipated political coordination seeks to shield the Executive against governance shocks, although the maintenance of high interest rates continues to shrink risk appetite and restrict the flow of productive capital to the real economy. The structural causes of this scenario involve the chronic need for party coalitions to approve fiscal and budgetary reforms, while market risks lie in exchange rate volatility and the deterioration of inflationary expectations, evidenced by the 12-month accumulated IPCA of 4.44% — which fell by 4.31% over the 30-day horizon, but rose by 4.23% in the 7-day variation. Each of these variables demonstrates how institutional instability quickly translates into higher risk premiums charged by investors in futures markets. For the 30-day horizon, accentuated volatility is projected in the interest rate and exchange rate curves, driven by the official start of electoral propaganda and the tone of candidates' speeches. In 90 days, market focus will shift to the viability of regional alliances and the real impact of the formation of new congressional factions on the Union Budget. In 180 days, the economic scenario will reflect the ballot box results, testing the capacity of the next power arrangement to implement structural reforms without compromising fiscal stability. As practical guidance for investors and heads of households, the moment requires extreme caution and asset shielding through diversification into assets tied to inflation or the Selic rate, avoiding the assumption of unnecessary risks in variable income while political volatility prevails. Applying the concept of value and margin of safety, savers should prioritize capital preservation through contributions to high-liquidity fixed income, maintaining an opportunity reserve to capture eventual bargains generated by temporary price distortions caused by the electoral calendar.