Brazilian lawmakers press for interest rate cuts after Lula's election win

Federal deputy Lindbergh Farias of the Workers' Party accused financial markets of politically sabotaging Brazil's economy after President Luiz Inacio Lula da Silva's re-election victory. In a post on social media platform X, he questioned why interest rate projections changed between the Friday before the runoff and the period after the vote.

Farias said markets had projected a 0.5 percentage point rate cut this year if Flavio Bolsonaro had won, but now project holding the Selic rate at 13.75 percent following Lula's victory. He called the shift an attempt to pressure monetary policy and harm the Brazilian economy.

“There is nothing technical about this. They are making politics and sabotaging our economy.”

"There is nothing technical about this. They are making politics and sabotaging our economy," Farias wrote. He added that the Selic rate should be decided by Brazil's economy, not by the mood of financial markets.

The lawmaker argued that interest rate decisions should follow concrete economic conditions, including inflation, activity levels, job creation, and credit availability. He said financial agents should not override the Central Bank's macroeconomic analysis.

Other government allies joined the criticism ahead of this week's Copom meeting. Deputy and former PT president Gleisi Hoffmann said financial markets have "the DNA of authoritarianism" and had supported Flavio Bolsonaro for president.

Deputy Zeca Dirceu said interest rates must fall but not by force, and that billionaires would pay the bill because that was the decision of the ballot box. The statements follow remarks by former chief of staff Rui Costa about financial speculation and an article by economist Andre Lara Resende criticizing the Central Bank's current monetary policy.