The president of the Central Bank, Roberto Campos Neto, said this Monday (12) that he sees the proposals of the candidates in the United States presidential election as largely inflationary, adding that the country must have an expansionary fiscal policy to win both ways.
According to the BC president, this assumption raises questions about whether the Federal Reserve’s interest rate will return to pre-pandemic levels, given a new methodology from now on.
“The proposals of the US elections have been largely inflationary,” Campos Neto said during a speech at the inauguration ceremony of the new Fundacao Getulio Vargas (FGV) complex in Sao Paulo.
“In general, there is a perception that no matter who wins the election, our fiscal policy in the United States is not going to be very tight,” he said.
The main candidates in the presidential election to be held on November 5 are current Vice President Kamala Harris, as the Democratic representative, and former Republican President Donald Trump.
On the other hand, he pointed out that while he sees inflation in the US heading towards the Fed’s 2% target and the possibility of a recession in the country, which led to major risk aversion in global markets last week, this is not the scenario BC is based on.
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“We think there are elements that point to a slowdown in the economy, (but) that doesn’t seem to be the most likely scenario,” he said.
