# Milei calls Lula a "leftist thief" four days before a Brazilian runoff that polls show within two points

Brazil's foreign ministry condemned the remarks as interference, and a Folha columnist warns that both candidates' plans to expand state-bank lending would push interest rates higher.

- Published: 2026-10-21T05:06:44.357Z
- Canonical: https://polylog.news/2026-10-21/milei-calls-lula-a-leftist-thief-four-days-before-a-brazilia
- Publisher: Polylog (Global desk)
- Section: macro
- Sources: [MercoPress](https://en.mercopress.com/2026/10/20/milei-calls-lula-a-leftist-thief-and-says-he-hopes-he-will-not-steal-brazil-s-election?utm_source=feed&utm_medium=rss&utm_content=main&utm_campaign=rss), [Agência Brasil](https://agenciabrasil.ebc.com.br/internacional/noticia/2026-10/itamaraty-acusa-milei-de-tentar-interferir-na-eleicao-brasileira), [Folha (Mercado)](https://www1.folha.uol.com.br/colunas/bernardo-guimaraes/2026/10/proposta-dos-candidatos-para-credito-levam-a-juros-maiores.shtml), [Buenos Aires Times](https://www.batimes.com.ar/news/latin-america/brazil-again-accuses-milei-of-election-interference-after-lula-remark.phtml)

Argentine President Javier Milei on Tuesday accused Brazilian President Luiz Inácio Lula da Silva of running a "dirty campaign." He called Lula a "leftist thief" and said he hoped Lula would not "steal" Sunday's runoff against Senator Flávio Bolsonaro, [MercoPress reported](https://en.mercopress.com/2026/10/20/milei-calls-lula-a-leftist-thief-and-says-he-hopes-he-will-not-steal-brazil-s-election?utm_source=feed&utm_medium=rss&utm_content=main&utm_campaign=rss). Brazil's foreign ministry, known as Itamaraty, issued a formal note of repudiation of the insults and of Milei's suggestion of fraud, [the state news agency Agência Brasil reported](https://agenciabrasil.ebc.com.br/internacional/noticia/2026-10/itamaraty-acusa-milei-de-tentar-interferir-na-eleicao-brasileira). Brasília called the remarks an "unacceptable" attempt to interfere, [the Buenos Aires Times reported](https://www.batimes.com.ar/news/latin-america/brazil-again-accuses-milei-of-election-interference-after-lula-remark.phtml).

The race is close. Flávio Bolsonaro led the first round with 47% to Lula's 45%. A polling average puts him at 51.1% of valid votes against Lula's 48.9%, [the Rio Times reported](https://www.riotimesonline.com/brazil-runoff-polls-2026/). Individual polls range from a 51-49 Lula lead to a 52-48 Bolsonaro lead. Market pricing shows investors favor one outcome: the Ibovespa closed at a record 209,066.90 on October 9, about 8.8% above its last close before the first round, [according to the Rio Times](https://www.riotimesonline.com/brazil-election-markets-real-ibovespa-adrs-2026/).

Economics columnist Bernardo Guimarães argues that the two candidates' platforms converge on one point that should worry bondholders. In a Globo interview last week, Lula promised "the biggest credit policy the country has ever known." Flávio Bolsonaro and his adviser Daniella Marques also propose expanding credit through the state bank Caixa, [Guimarães wrote in Folha](https://www1.folha.uol.com.br/colunas/bernardo-guimaraes/2026/10/proposta-dos-candidatos-para-credito-levam-a-juros-maiores.shtml). He concludes that both plans lead to higher interest rates. Subsidized state-bank lending weakens the effect of the central bank's benchmark Selic rate, so the central bank must hold it higher to slow the rest of the economy.

## What this means

Markets priced a Flávio Bolsonaro win after the first round. A Lula victory would therefore move the real and Brazilian local rates more than a Bolsonaro one. That repricing reflects positioning around which candidate wins, since the Folha analysis shows both camps planning similar credit expansion through state banks. Directed credit forces the central bank to keep the Selic higher for longer. That penalizes private borrowers and supports holders of Brazilian floating-rate government debt. Milei's intervention matters less for the vote than for Mercosur. If Lula wins, relations between Brasília and Buenos Aires will be openly hostile, which complicates trade and Argentina's access to its largest market. The best-documented precedent is 2014, when state-bank lending expanded around Dilma Rousseff's re-election and preceded the 2015 to 2016 recession. The desk's read is that the post-election rally, or the sell-off after a Lula win, fades within weeks if the winner keeps the state-bank credit plan, because that plan keeps rates high. The read would prove wrong if the winner names a finance minister who drops the Caixa expansion and commits to the fiscal framework.

## What to watch

- Who the winner names as finance minister. That choice will signal whether the credit-expansion promises survive the campaign.
- Whether Brazil's electoral court finds Meta's handling of both campaigns compliant before Sunday. A ruling against the company could feed disputes over the result.
- Diplomatic steps between Brasília and Buenos Aires after the vote. A recall of ambassadors would bring Mercosur trade risk into play.