Long-Term Treasury Yields Are Unacceptable and Require Correction, Says Government

The Finance Minister's statement that the long-term rates demanded by the National Treasury are unsustainable brings to the center of the economic debate the suffocating weight that the cost of debt exerts on companies, families, and the planning capacity of the Brazilian State itself. The discussion over these rate levels gains urgency as the benchmark interest rate remains firmly anchored at 14.00% per year, validated without significant changes over 7 and 30 days, imposing a severe liquidity restriction environment and raising credit costs across all productive and consumer lines. This prolonged monetary tightening scenario directly clashes with exchange rate dynamics, reflected in the commercial dollar at R$ 5.17, showing a slight 1.47% increase over seven days compared to R$ 5.09, but accumulating a subtle 0.63% contraction over thirty days relative to the previous R$ 5.20. This currency fluctuation, combined with a 12-month IPCA inflation rate cooling to 4.44% — presenting a monthly variation compression to 4.31% from the previous 4.64% — highlights the paradox of controlled inflation coexisting with some of the highest real interest rates on the planet. Crossing this structural discussion with the portal's recent editorials, which record five negative analyses focused on institutional risks, state political disputes, and corporate penalties in retail and capital markets, it is clear the business environment operates defensively. From the perspective of structural macroeconomics based on credit and liquidity cycles, the expansion of public and corporate indebtedness amidst long, high yield curves drains resources that should irrigate the real economy, turning the cost of capital into a systemic bottleneck affecting everything from exporting agribusiness to small urban retailers. Deepening the analysis of this imbalance, the challenge is not exclusively domestic, amplified by global sovereign asset repricing, with 30-year US bonds hitting two-decade nominal highs since 2007, alongside unprecedented monetary tightening by the Bank of Japan. For Brazil, whose public accounts face historical budgetary rigidities, paying high rates to roll over long-term debt compromises fiscal space for infrastructure investments, creating a cascade effect that raises real estate financing, corporate working capital, and consumer credit costs. Looking to the short and medium term, continuous volatility is projected for local markets over the next 30 days, heavily dependent on US Treasury yields and domestic absorption of the 14.00% Selic rate. Over a 90-day horizon, persisting high real rates will continue to pressure B3-listed corporate profit margins and raise default rates in unearmarked credit, while the 180-day scenario will require absolute clarity from the public sector on fiscal guidelines to mitigate the risk premium embedded in the long yield curve. For individual investors and households, the moment demands careful application...