Brazil’s Lula Vows to Work for Lower Rates

BRAZIL · ECONOMY

Lula, Brazil’s 81-year-old president, used his first national radio and television address since winning a fourth term to promise lower interest rates on Sunday, 8 November. He gave no measures and no timetable, and the Central Bank of Brazil, not the president, sets the rate.

Brazil’s president says he will work to bring interest rates down, but the interest rate itself is set by an independent central bank. His speech offered a goal, not a plan.

What Lula Said

Lula told the nation that “the path of public debt and high interest rates worry me.” He added that he would stay committed to fiscal responsibility, meaning the spending rules that limit the federal budget. He set a goal of lifting investment above 20% of gross domestic product (GDP), the size of the economy, together with private companies. “For that, we will create the conditions to lower the interest rate,” he said.

The speech did not say how. It named no spending cuts, no new rule and no date.

Why the President Does Not Set the Rate

Brazil’s central bank has been legally independent since a 2021 law, so its Monetary Policy Committee (Copom) decides the Selic, not the president. On Wednesday, 4 November, the Copom held the rate at 13.75% by a unanimous vote, ending a run of cuts.

Many analysts had expected a cut to 13.50%, so the hold surprised part of the market. The central bank’s weekly Focus survey of economists put the median forecast for the Selic at the end of 2027 at 12.5% on 30 October.

Lula’s second lever is the budget. Gross public debt stood at 82.9% of GDP in September, the central bank reports, a level investors watch when judging how low rates can go.

Lula said the government would keep its fiscal rules, while also promising new relief for households. He said the state would buy family debts from banks and forgive debts of micro-entrepreneurs owed to the federal government, without giving amounts or dates.

What Markets Want to Hear

Investors will look for two signals after the speech. One is a credible plan to slow debt growth, and the other is how the central bank weighs the promise at its next meeting.

Our earlier reports covered Lula’s room to shape the central bank board and why rate cuts stalled. The November hold is covered in our Big Read.

What Prediction Markets Say

Polymarket, a crypto-based prediction market, lists the Central Bank of Brazil’s December decision as a bet, under the title “Bank of Brazil decision”. On 9 November at 5:02 a.m. ET it priced no change at 88.5%, a quarter-point cut at 5.7% and a quarter-point rise at 1.6%, with US$64,831 traded.

For January 2027, a thinly traded market (about US$13,100) gives no change 59.5% and a quarter-point cut 15.8%. These prices are real-money bets, not polls, and they can move quickly.

Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.

What It Means for You

For a US investor in Brazilian bonds or in New York-listed Brazilian shares, the speech changes little today, because the rate is unchanged and no policy was announced. In our assessment, a high Selic pays holders of real-denominated bonds more, while a credible cut plan would lower that yield and could weigh on the currency.

The next hard data point is the Copom meeting on 8 and 9 December. Until then, the debt path will matter more than the speech itself.

More on Lula’s agenda is on the Brazil hub. Our report on his remarks on big technology platforms, made in the same address, adds context.

What Is Not Known

It is not known which measures, if any, the government will use to lower interest rates, or when. No cost or timetable was given for the debt-purchase and debt-forgiveness promises.

It is also unknown how the central bank board will weigh the speech. Lula won the 25 October runoff with about 64.2 million votes, roughly 51.8% of valid votes, according to the Superior Electoral Court (TSE), and he begins a fourth term in January 2027.

Frequently Asked Questions

Did Lula say he would cut interest rates?

He said he would “create the conditions to lower the interest rate”. He did not promise a cut, name a measure or give a date.

Who sets Brazil’s interest rate?

The central bank’s Monetary Policy Committee (Copom) sets the Selic. Since a 2021 law, the bank is independent of the president.

What is the Selic rate now?

The Selic is 13.75% a year, held at the Copom meeting of 4 November. The next meeting is on 8 and 9 December.

What else did Lula promise on the economy?

He promised to buy household debts from banks and to forgive debts of micro-entrepreneurs to the federal government. He gave no amounts.

Sources: Presidential national address of 8 November 2026 (radio and television); Central Bank of Brazil, Selic history and Focus survey of 30 October 2026; Central Bank of Brazil, gross general government debt series, September 2026; Superior Electoral Court (TSE), runoff result of 25 October 2026; Polymarket, Bank of Brazil decision in December (read 9 November 2026).