Political Environment and the Price Thermometer: The Impact on the Real Economy

This episode of popular demonstration adds to a sequence of alerts making up our recent editorial collection, marking the sixth consecutive note with a negative tone on the portal under the Economic Policy category, aligned with themes such as candidates' fiscal risk and the search for out-of-court restructuring by major companies. From the perspective of credit and liquidity cycles, moments of greater political friction usually precede periods of retraction in risk appetite, as foreign capital and local investors recalibrate their positions in the face of regulatory uncertainty. Liquidity tends to contract not only due to official monetary tightening, but also due to the hesitation of decision-makers to allocate resources to higher-risk assets.

Deepening the structural analysis, the friction between public opinion and central government figures exposes the ongoing challenge of balancing public accounts and political stability in a year of intense polarization. Each oscillation in the perception of governability reverberates in the risk premiums embedded in DIs and in the volatility of assets traded on B3. When we cross the exchange rate level of R$ 5.16 with inflation at 4.44%, it becomes evident that the market prices in a high caution premium, requiring increasingly greater operational efficiencies from companies to preserve shareholder value amid a restrictive and politically turbulent macroeconomic environment.

Looking at the medium- and long-term horizon, three distinct windows for capital allocation and financial planning are emerging. Over the next 30 days, the probability is high that the market will continue reacting to short-term political noise with high volatility in risk assets and the maintenance of high interest rates. In 90 days, with medium probability, the focus is expected to shift to the government's fiscal execution and the developments of official inflation, which may test new ranges if the exchange rate suffers external pressures. Meanwhile, in the 180-day horizon, with medium probability, electoral dynamics and the anticipation of debates on structural reforms will define the definitive tone for asset pricing and the availability of private credit.