Central Banker Stands Alone With Brazil’s Credibility Crumbling
- World’s most hawkish central bank expected to hike even faster
- Inflation to soar as Bolsonaro plans spending before election
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Roberto Campos Neto, the head of Brazil’s central bank, had been counting on a certain amount of fiscal discipline from his counterparts across town in the Treasury building. This, at least, is what he repeatedly told investors in recent months as they grew anxious about the new social spending programs that President Jair Bolsonaro was talking about unleashing.
Last week, Campos Neto’s public assurances slammed into the harsh reality of life in Brasilia on the eve of an election year. Bolsonaro, desperate to boost his approval ratings, announced a program that was so big and broad that it triggered a week-long rout in financial markets and the mass resignation Thursday night of four key members of that vaunted Treasury team.