Economist José Sergio Gabrielli, general coordinator of the government program for President Lula's reelection campaign, told Folha de S.Paulo that Brazil's National Treasury should intervene in the public bond market to bring down long-term interest rates. He also said the campaign is discussing a further increase in the income tax paid by the "super-rich" in an eventual new term, on top of changes in force since January.

Gabrielli, a former Petrobras president, said one possible measure would be for the Treasury to buy back public bonds, following the example of an announcement made last week by the United States government to contain rising interest rates. In Brazil, this kind of operation is used to stabilize the market when it malfunctions. In March, the Treasury bought nearly R$ 30 billion in bonds amid expectations that the central bank's benchmark Selic rate would remain high because of the war in Iran. According to Folha, it was the Treasury's largest intervention in the interest rate market since 2020, when the Covid-19 pandemic was declared.

Gabrielli attributes the growth of public debt to interest charges. The private sector takes the opposite view and defends fiscal restraint to contain government spending. The economist also criticized a Folha editorial published on August 16 that demanded urgent cuts in federal spending to avoid a fiscal crisis and prolonged high interest rates. In his view, the text placed Brazil "on the brink of chaos."

New increase in tax on the super-rich

The income tax changes mentioned by Gabrielli have been in force since January, under a law signed by Lula in November 2025 that exempted monthly earnings of up to R$ 5,000 and created a minimum tax on high incomes, of up to 10 percent for those earning more than R$ 600,000 a year. He told Folha the campaign is discussing raising that charge again in a next term.

Although he coordinates the government program, Gabrielli has not been tapped to speak on behalf of Lula's campaign since a June interview with Folha, the newspaper reported. His criticism of the fiscal framework rule known as the arcabouço triggered what became known as the "Gabrielli effect" and led Finance Minister Dario Durigan to work on containing the damage in financial markets. Lula is seeking a new term in the October elections.