The STF's Stance on the Election and Its Reflections on the Markets

The recent statement by the Federal Supreme Court (STF) minimizing discussions on minister impeachment proposals directly links institutional expectations for the upcoming Senate election to economic agents' risk appetite and local asset pricing. In a macroeconomic environment already pressured by a 12-month accumulated IPCA of 4.44%—which recently slowed from 4.64% in the previous cycle—the exchange rate behavior takes center stage in price formation. The commercial dollar quoted at R$ 5.17, showing a 1.47% rise in its 7-day trend compared to R$ 5.09 on August 10, 2026, clearly illustrates how political volatility and institutional uncertainties instantly impact the exchange rate and cause temporary foreign capital flight. This friction between Powers reflects a predominantly negative sentiment in our recent coverage, where legal and regulatory uncertainty compresses economic growth and raises borrowing costs. Looking ahead, political noise will likely dictate the Ibovespa's pace in the short term, while the 180-day horizon will focus on the government's ability to deliver credible fiscal reforms.