Economic Uncertainties Influence Markets

Economic Uncertainties have dominated the global scene, especially in Brazil and the United States.

In this article, we will explore how political and economic uncertainties impact markets, the growing concern about Brazil's fiscal situation as the 2026 elections approach, and the need for caution in the face of tariffs imposed on the international scene.

We will also address recent U.S. Supreme Court decisions, the Federal Reserve's interest rate cuts, and their implications for the Brazilian economy, as well as emerging optimism stemming from falling inflation expectations and the strengthening of the real.

Brazil-US Uncertainties and Repercussions on the Markets

Political and economic uncertainties in Brazil and the United States have created an environment of instability that has a direct impact on international financial markets.

The relationship between fiscal policies, Federal Reserve decisions, and Brazilian government actions influence investment flows and investor confidence.

In this context, topics such as the Brazilian fiscal situation, the implications of the tariffs imposed by the American Supreme Court, and future prospects for interest rates in both countries will be addressed.

Brazilian Fiscal Situation and the 2026 Elections

Brazil's fiscal situation is causing concern amid the 2026 election scenario. The growing indebtedness and the fragility of the budget put pressure on the government to take effective measures.

Uncertainties affect market confidence, requiring swift action to avoid an imminent economic collapse.

Among the main budgetary challenges and expected reforms, the following stand out:

• Necessary reforms
• Implementation of a strict fiscal adjustment
• Reduction of excessive public spending
• Strengthening fiscal institutions

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According to one expert, “fiscal success will depend on solid political decisions and the ability to communicate with society.

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U.S. Supreme Court Tariff Review

The recent decision of the Supreme Court The US's review of the legality of the imposed tariffs aimed to assess whether they violate internationally recognized global trade principles.

Judicial review directly impacts the economic scenario, since, even after some exemptions, approximately 73% of Brazilian exports remain subject to additional tariffs.

This scenario reflects the loss of competitiveness of Brazilian products, forcing adaptation in other international markets.

Although the revision does not appear to have a profound impact on Brazil's Gross Domestic Product (GDP), it does alter the dynamics of trade relations between the countries.

It is noted that the imposition of these tariffs, under constant monitoring, sensitizes markets and can pressure companies to seek diversification in exports.

The impact is distributed differently across different sectors.

Below, we present the types of tariffs and its possible effects:

The analysis of tariffs requires caution, as about 12% of the country's total exports go to the USA.

It is observed that the removal of some tariffs benefits certain sectors, while others still face challenges, exacerbated by the lack of competitiveness in the North American market.

The expectation is that future decisions may bring a more favorable alignment to Brazilian exports.

Fed Rate Cut and Independence Debate

The recent 0.25 percentage point cut in interest rates by the Federal Reserve brought to the fore the debate on the independence of the institution.

This move aims to stimulate the economy, but raises questions about political influences after attempts to dismiss central bank directors.

This action impacts the global economy, requiring caution from investors.

To the lower rates seek to boost economic growth, while concerns emerge about the Fed's vulnerability to government pressure.

• Effect on the dollar
• Impact on credit
• Institutional trust shaken

“This cut is a dilemma between stimulating the economy and preserving autonomy,” said a prominent economist.

Falling Inflation, Strong Real and Job Market

Falling inflation is bringing new hope to the Brazilian economy.

With inflation expectations declining, the Central Bank is analyzing possibilities of adjusting the Selic rate.

This movement could have a significant impact on the economy, especially if the scenario of appreciation of the real.

Appreciation of the real After an unstable period, the real is showing signs of strengthening.

This appreciation could have a positive effect on import prices, helping to contain inflationary pressure.

As a result, policymakers may feel more comfortable considering Selic rate cuts.

With the stronger real, the Brazilian economy has the chance to grow sustainably.

Job Market The solid performance of the Brazilian labor market is also contributing to this positive picture.

Job creation remains robust, supporting household consumption and helping to strengthen consumer confidence.

If this trend continues, the Central Bank may have more reason to target cuts in the Selic rate, thus unlocking more growth potential for the economy.

The combination of these forces offers an encouraging outlook for Brazil in 2024.

Economic Volatility Influenced by Internal and External Factors

Political and economic uncertainties in Brazil and the US continue to shape the volatile economic landscape in 2024. In Brazil, the proximity of the 2026 elections intensifies the fiscal concern, while in the international market, issues such as tariffs and decisions of the US Supreme Court have a direct impact on Brazilian exports.

However, the effect on GDP should be limited.

In addition, the 0.25 percentage point cut in interest rates by the Federal Reserve raises concerns about the institution's independence.

However, signs of optimism are emerging, such as falling inflation expectations and the strengthening of the real.

The possibility of cuts in Brazilian interest rates, depending on the labor market, signals a path to easing internal tensions.

Therefore, continuous monitoring of these factors is essential, since core inflation on the rise and continued volatility pose challenges for both investors and economic policymakers.

In short, the current economic panorama is marked by volatility and uncertainty, requiring constant attention to internal and external influences.

The economic future will depend on the ability of markets to adapt to constantly changing conditions.