Lula fights for more growth and discovers opportunities.

The country is going through Carnival after a period of dispute over the issue of inflation and its repercussions on economic growth prospects.

Furthermore, they highlight the political implications for the entities involved in tenders that promise to set standards for future controversies.

The dispute became clearer at the beginning of the month, after the meeting in which the Central Bank's Monetary Policy Committee decided to maintain the benchmark interest rate at 13,75%, the highest in the world. 

To add a grain of salt to the open wound, the Central Bank, in a statement about the meeting, put forward arguments to supposedly justify preventive measures in the face of uncertainty about the sustainability of public accounts due to the advent of the Lula government. The statement about the meeting said, referring to the accuracy of the scenarios it projected for inflation: "The committee believes that the uncertainty surrounding its assumptions and projections is currently greater than usual."

It also expressed "the still high uncertainty about the future of the country's fiscal framework and fiscal stimulus, which implies supporting aggregate demand, partially incorporated into inflation expectations and asset prices."

In other words, the Central Bank was saying that Lula's election represented a threat to its price control policy.

In addition to the defiant tone, the text also contained reservations about the economic growth intentions advocated by Lula since the election campaign. 

These were criticisms from an authority and an organization that, it's worth noting, regardless of the degree of their independence, are legally subordinate to the new leader.

Remaining from the defeated previous government, the Central Bank and its president spread disbelief in the sincerity of the fiscal responsibility commitments announced by the new head, in what was understood as an attempt to contest the direction of the new administration.  

The suspicion was unavoidable: was (or is?) the Central Bank seeking to establish itself as an opponent of the new president?

Lula's reaction was exemplary in defending his sovereignty, which, incidentally, was not being challenged for the first time, even in such a short term in office.

The president considered the interest rate a "shame" and did not spare criticism from Roberto Campos Neto himself, whom he called "that citizen," probably pointing him out his place.

The message was explicit: Lula is determined to remain faithful to the ideals that won him the election.

This commitment emphasizes the fight against poverty and inequality through economic growth with the guiding role of the State and the activation of social inclusion and remediation programs – which, Lula always takes the opportunity to insist, should be seen not as an expense, but as an investment. 

What followed was an article by André Lara Resende that pointed out the unrealistic nature of the idea that the country was facing a fiscal "precipice." This was followed by a lightning-fast manifesto from hundreds of economists advocating for lower interest rates and criticizing the Central Bank. 

In response to Lula's reaction and the resulting repercussions, Campos Neto himself arranged an interview on the Roda Viva program, where he oscillated between trying to defend his opinions and reconciling with the government. 

In the same context, two days later, the president of the Central Bank made a U-turn: he asked market participants for "goodwill" towards the government, which he said was working on it. 

to improve the fiscal environment. 

To cap off the week, statements emerged from three unlikely market participants. 

financial. No, as expected, not in defense of the Central Bank's autonomy, but against the level of the Selic rate, the target of 

Inflation and the unrealistic nature of monetary policy, indirectly supporting Lula and driving a wedge into the heart of Faria Lima. 

Given their impact on employment and economic activity, interest rates of this magnitude are not only politically unfeasible but also technically unsustainable, as the IPCA projections themselves indicate.

As if that weren't enough, an opinion poll by the Quaest Institute showed that 76% of Brazilians believe Lula is right to force interest rates down. 

More than a one-off victory, based on the humor or intuition of an experienced politician, what emerges from this episode is Lula's willingness to create conditions for a more relaxed, or less negative, reception to the proposed fiscal framework to be sent to Congress by the Ministry of Finance in March.

Above all, a political pattern of reaction emerges on the part of the president, who presents himself for debate and ends up creating spaces of tolerance even where the environment was previously thought to be much more inhospitable.