Political Instability in the US: How Trump's Erosion Affects Global Risk

The record drop in the popularity of the US administration, combined with declining public support for military interventions in Iran, signals a critical shift in global investor sentiment regarding geopolitical stability. When foreign policy loses domestic backing, the predictability of risk assets diminishes drastically, forcing the market to price in an 'uncertainty premium' that directly reverberates through the volatility of global stock exchanges. For the Brazilian investor, this movement is not isolated; it forms part of the mosaic of tensions we have recently observed in our analyses regarding the cost of capital for major companies listed on B3.

Currently, we observe the commercial dollar quoted at R$ 5.1512, maintaining a downward trajectory of 0.67% over the last seven days and an accumulated decline of 0.22% over a 30-day horizon. Although the US currency presents this slight decompression, exchange rate stability is a misleading indicator if not cross-referenced with the risk aversion imposed by the Iranian scenario. The 12-month accumulated IPCA, recorded at 4.44%, shows that despite external pressure, domestic inflationary dynamics are still seeking equilibrium, but any supply shock derived from an escalation in the Middle East could abruptly alter this trajectory.

Cross-referencing this fact with our editorial archive, we realize this is the fourth time in a short period that we address how global tensions and high interest rates force a readjustment of expectations. Applying the lens of the 'Asymmetric Risk' school, we note that the financial market often ignores political pessimism until it becomes a tail event. The risk here is not just the conflict itself, but the asymmetry between the current asset price, which still seems to ignore a potential rupture in US foreign policy, and the reality of an environment where diplomacy is weakened.