Campos Neto sees full employment as a “threat” to the economy

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247 – The president of the Central Bank, Roberto Campos Neto, expressed concern about the sign of full employment in the Brazilian labor market, during an interview with CNN Brasil. According to him, although it is a positive surprise, there are fears about the potential inflationary impact of this situation.

Second report from Valor, Campos Neto highlighted that when companies face difficulties in hiring and are forced to increase salaries to maintain the level of production, this can trigger an inflationary process. He highlighted that the services sector, especially those that require a lot of labor, is the Central Bank’s focal point of attention.

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The unemployment rate released by IBGE for the first quarter of this year, the lowest since 2014, reinforced this concern. The BC president noted that signs of inflationary pressure have already begun to appear in some sectors, although they have recently decreased.

Furthermore, Campos Neto addressed the change in the primary result target for 2025 and its impact on the interest curve, stating that this change affected market expectations. He acknowledged that the market already anticipated difficulties for the government in meeting previous targets and that the change only increased this concern.

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As for American monetary policy, the BC president predicted that interest rates in the United States will remain high for a prolonged period, which will have repercussions in other countries. Although he emphasized that there is no mechanical relationship between US and Brazilian interest rates, he admitted that American monetary policy affects decisions in Brazil.