BC gives confidence to the government by continuing to expect lower interest rates in the upcoming meetings | Anna Flor’s blog

In its statement and decision on Wednesday, the Central Bank chose not to give more seriousness to the last-day movement within the government that buried the zero deficit in 2024.

The decision reflects a temporary move to lower inflation, but it also represents a signal from British Columbia toward a better relationship with the government, which in the recent past has criticized the league — especially its president, Roberto Campos Neto — for reining in inflation. It falls into the interest rate.

The message about the danger of increasing spending in 2024, and not achieving the goal promised by Finance Minister Fernando Haddad, came only in the sixth paragraph of the statement.

The text read: “Taking into account the importance of implementing the fiscal objectives that have already been established to stabilize inflation expectations and thus manage monetary policy, the Committee reaffirms the importance of vigorously pursuing these objectives.”

In the previous two nominations, Campos Neto complained to the government that he learned about the candidates through the press.

The other reason is that the swing within BC’s board is starting to weigh on the government’s side. Of the nine members, Lula already has two and has now appointed two more.

Lula’s government is beginning to carry more weight, and this should be reflected in views that may encourage lower interest rates even as the prospects for fiscal policy to be subject to strict balancing diminish.