Caiado at the electoral starting line: The weight of fiscal cost and Dollar volatility in 2026

The launch of Ronaldo Caiado's electoral campaign, initiated with motorcades in the Federal District surroundings this Sunday (16), signals the beginning of a period of intense pressure on the risk perception of economic agents. The movement, although political, occurs at a time of exchange rate fragility, with the commercial Dollar quoted at R$ 5.2236, recording an appreciation of 2.12% over the last 7 days. The choice of the surrounding region for the kickoff is not merely geographical, but an attempt to anchor the campaign narrative in local management results, in a scenario where the financial market already prices in political instability as a vector for increased volatility in Brazilian assets.

The current macroeconomic environment requires redoubled attention. While the IPCA accumulated over 12 months stands at 4.44%, the recent trajectory shows a fluctuation of -4.31% in the monthly variation, highlighting a disinflation that still struggles to consolidate in the face of a pressured exchange rate. The Selic rate, maintained at 14.00% per year, acts as the main liquidity containment mechanism, but the stability of this indicator is under constant threat by the need to finance electoral promises. Investors should note that the 0.73% upward trend of the dollar in 30 days reflects the risk aversion typical of presidential succession years, where uncertainty about fiscal continuity dictates the outflow of foreign capital.

Crossing this fact with this portal's recent history, we observe that this is the seventh political-economic news piece with an instability bias in a short space of time, corroborating a negative market sentiment. Through the lens of credit and liquidity cycles, we are in a phase of severe monetary tightening. Excessive political activism at this stage of the cycle tends to further contract private credit, raising the cost of capital for entrepreneurs. The promise of 'grit and determination' in a scenario of double-digit interest rates and a volatile exchange rate creates natural friction: the demand for fiscal expansion collides head-on with the need for austerity to maintain Treasury solvency.