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Waack links Brazil's market doubts to uncertainty over the rules

The commentator argues that Lula's legislative weakness and reliance on the Supreme Federal Court deepen investors' concerns beyond the budget.

Channel: CNN Brasil ·

BrazilStory of October 27, 2026Trari Newsroom

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Waack: Mercado duvida de Lula e das regras do Brasil

Brazil's post-election market reaction reflects doubts about the durability of the country's rules, not just its public finances, journalist William Waack argues in a brief commentary for Brazil's CNN Brasil.

Waack points to a weakening real and rising future interest rates after Luiz Inácio Lula da Silva's presidential victory. In his assessment, Lula faces a fiscal trap while lacking a congressional majority: he won the presidency, but the center-right prevailed in the legislative elections.

That combination, Waack argues, leaves economic decision-makers looking at a minority government under pressure over public finances. He says they distrust its primary-surplus target, a budget goal that means collecting more revenue than the government spends before interest payments. He also criticizes Lula's dismissive attitude toward achieving such a surplus.

The commentary then turns from fiscal policy to institutions. Waack predicts that Lula will again depend on the Supreme Federal Court, Brazil's highest court for constitutional matters. He sharply criticizes the court's institutional conduct and argues that legal instability adds another layer of uncertainty for investors. His closing questions concern which rules apply in Brazil, and how long those rules will last.

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