On October 18, 2023, President Luiz Inácio Lula da Silva (PT) held a meeting at the Palácio do Planalto to address the political wear faced by the government. At the meeting, the head of the Executive expressed dissatisfaction with the decision of the Monetary Policy Committee (Copom) to increase the Selic rate by 0.25 percentage points, raising it to 14.75% the following day.
Lula expected the Selic rate to be set at 14% on that date, according to reports from meeting participants. The monetary policy adopted by the Central Bank, led by Gabriel Galípolo, did not heed the criticisms made by former minister Fernando Haddad (PT) about the performance of the institution’s former president, Roberto Campos Neto. The interest rate hike was, thus, a source of tension within the federal administration.
The high indebtedness of Brazilian families was pointed out as one of the causes reducing the impact of the measures adopted by the government, such as the minimum wage adjustment and the expansion of the Income Tax exemption bracket. Because of this, the positive effect on workers’ purchasing power ends up being limited, worsening the economic situation.
Lula attributed the scandal involving Banco Master to the management of former president Jair Bolsonaro (PL) and former Central Bank president Roberto Campos Neto. The bank’s crisis, which has been undergoing an acquisition process by Banco de Brasília (BRB) since 2023, was mentioned as an example of the problematic inheritances left by the previous administration.
During the meeting, the president and his ministers recognized that the corruption cases inherited harm the government’s image, even though the investigations continue under his management. On the other hand, the current administration does not establish direct accountability against Roberto Campos Neto in the conduct of monetary policy, reflecting a certain dissociation between areas of the Executive Branch.
Furthermore, the government faces difficulties in communication to turn the investigation of allegations into political gains. The minister of the Secretariat of Social Communication (Secom), Sidônio Palmeira, stated that fighting attacks is not the role of official communication, emphasizing the separation between political action and the government’s institutional communication.
Another point of dissatisfaction discussed at the meeting was the lack of prior communication from the Office of the Comptroller General (CGU) regarding the frauds discovered at the National Institute of Social Security (INSS) in 2025. This failure contributed to the surprise and internal wear, preventing an early response from the presidential team.
Information leaks occurred within the Federal Police (PF) and have been used for political wear. Lawyer Marco Aurélio de Carvalho even declared that the PF was internally divided, citing the investigation involving Fábio Luís Lula da Silva, the president’s son. In response, the head of the Federal Police, Andrei Rodrigues, stressed the operation with technical autonomy and independence since the beginning of the Lula administration.
The fight against corruption remains an official guideline of the administration, according to a declaration from the Federal Police. Nevertheless, Lula and his aides reaffirm that the Master and INSS scandals originated from the previous administration, showing the difficulty of dissociating the current political crisis from past government legacies.
Allies of the president assess that the frauds under investigation are exploited by opponents to weaken the government, especially in a scenario where monetary policy also suffers international influence. The war in Iran, for example, has altered analyses of the impact of rising oil prices and, consequently, on the interest rate hikes by the Central Bank.
The main concern of the meeting was the electoral wear caused by the combined effects of the economy and corruption scandals. The meeting highlighted the challenge of containing these political and economic pressures that directly affect the public evaluation of the Lula administration.
The conclusion of the process still depends on the continuity of investigations and the response of the responsible bodies. Additionally, the government will seek to improve communication on sensitive topics to minimize future damages. The expectation is that the measures adopted and the conduct of the investigations will be monitored in the coming months, especially as elections approach.
