SELIC, PIX, TRUMP E TRETA POLÍTICA: CAMPOS NETO ABRE O JOGO; VEJA ÍNTEGRA

No, look, I think that what we're seeing now in terms of tariffs and everything that's happening, sometimes it's important to go back a little, Emilio, because I was even thinking about writing an article about this, and over the last few years, since the reconstruction of the Marshall Plan, the United States has intentionally accepted tariff conditions, sometimes not reciprocal, in exchange for having the dollar as the dominant currency, right? So, over time, this has been happening. The dollar became a dominant currency, accounting for over 90% of everything, right? So, I think there's now a question as to whether this lack of reciprocity is reasonable or not. And it's also worth remembering that in all these agreements, and there are several documented as well, there was an idea that the United States would pay more for defense. And here are some examples that have been cited recently. So I think that in the end we're going digital, we're not going to the dollar, nor... I think there are already some articles being published. Asia is already becoming digitally interconnected. We already have solutions that can connect instant payment systems in real time. Latency, which is the time it takes, right? A payment is taking 4 or 5 seconds. And the truth is, if I have the whole system, everyone interconnected with instant payments, the risk of the currency ceases to be a relevant thing. So you'll be traded in dollars or euros or in remimbado instantly, digitally, like a general Pix, a giant Pix.

No, the Central Bank has two objectives: to control prices and to control, let's say, the health of the financial system. The two main objectives are, let's say, to make sure that the value of the currency is preserved, that the value of the currency is maintained, and that you have financial stability.

Yes, unfortunately, our main tool of work is sometimes interest.

It was. And they would say: 'No, that's it, the journalists talked a lot about it, because even now there's a lot of speculation about this business of the guys who are there, they really dominate this, you know more or less what's going to happen. You, like us, don't really know, you guess, you guess with your left, you guess with your right. How is that thing over there among you? You don't have a very good technical team.' The Central Bank has many people who studied abroad, who have master's degrees, who have doctorates, who have worked in modeling for a long time. Obviously, we live in an environment of certainty and the Central Bank works with uncertainty. And sometimes I see a lot of criticism, look, during the pandemic you lowered interest rates too much, but then you have to go back and remember that moment during the pandemic, when interest rates were very low, it was a moment when the United States had held an extraordinary meeting to lower interest rates. Uh, many people thought that Brazil's growth would be negative at 9%. And we didn't have much of an idea of what was going to happen with people at home, there was a lot of doubt about what was going to happen. So, it's curious because at the time people complained that we should have lowered interest rates more, and today people complain that interest rates have fallen too much. So it's important to understand that when you make that decision, you have variables at your disposal at that moment. Obviously, things change later. If you could look ahead, you know, have a crystal ball, look into the future, sometimes you would do things differently. But with the variables we have at hand, it's the best we can do with the instruments we have, right? The Central Bank doesn't have all the instruments either.

4 years, right? We passed the autonomy law. So, in fact, the idea is that the president stays for 4 years, but in different terms. So, he stays 2 years in one term and 2 years in another term, right? That is, if there is alternation of power in the executive branch, right? One president serves two years, and the other president serves two years. In my case, it was six years because we established autonomy mid-process, so it was important that I advance to the next term.

Okay, I'll try to answer quickly, as it's a question that would take time, but first, no, but feel free to ask. First, that topic I started talking about, which is that over time there was, let's say, an implicit understanding that tariffs would be reciprocal in relation to... To the United States. And if you look at it over time, it got a little worse, but the currency would be the dollar, right? And that was achieved. Today, the currency of negotiation is largely the dollar. And being, you know, the owner of the currency, which is the currency that negotiates everything, has value, right? When the United States prints money, it's as if it spreads the effect to other countries. So, it's very relevant. In exchange for that, there are some agreements that were of non-reciprocity, that is, the United States paid, uh, the United States charged less tariff than it paid, right, on similar products. That's one point. The second point that I think is relevant in this sense, when we look at the history of tariffs, we say that there are three Rs, right, which are income, revenue, reciprocity, that is, I want to have the same tariff that the other has, and restriction, that is, I want to protect my local industry. So, every tariff that exists has one of these three objectives, right? And, and sometimes it's difficult, we have several objectives. At the same time. When Trump's campaign started, we understood, well, he wants to, right, revisit the issue of reciprocity, that is, it's a fact that the United States today charges lower tariffs to other countries than other countries charge the United States. The United States exports a lot of services, and then you have to measure the added value of the service. It's a more complex thing. But let's imagine that you go for reciprocity, that is, you're going to say to the countries: 'Look, I want you to charge me the same for the same product as I charge you,' right? And there's a thesis behind this, which is that if everyone goes to the city, if everyone charges everyone the same, then you can achieve efficiency more quickly. Because if I charge you the same as you charge me for the same product, when we lower the tariff on that product, the gain for you and the gain for me is exactly the same. It's a zero gain. And if I charge you the same as you charge me for the same product, the moment we raise our prices, I raise mine and you raise yours, it's an equal loss for both of us. So, reciprocity allows you to achieve a better balance in the long term. So, I had been advocating for this, we understood, well, there will be a large reciprocity plan. When the table came out, Emilio, I was a little doubtful, because the table, you know, the tariff weights of the countries were not according to reciprocity, it was according to, you know, the trade balance, right, from one country to another. And that seemed very confusing to me, difficult to explain. It seemed like a calculation that wasn't very, let's say, elaborate and generated a lot of uncertainty, right? I think the world was even prepared to move towards better reciprocity. When that table came out and we looked at it, well, but then it's about balance. If it's about balance, it's not the R of reciprocity, it's the R of restriction, that is, protecting the local industry, which he also talked about in the campaign. I was going to do that, but now we're in this environment of uncertainty. So, I'm a liberal economist, I believe in free trade. Reciprocity is a path to free trade, because when you go for reciprocity it's easier for everyone to lower their prices together, because there's not much confusion in the negotiation. But now we'll need to see what happens, because it's generated a lot of uncertainty. Now it's important to say that yes, there is an asymmetrical treatment today in terms of tariffs for the United States. Yes, they agreed to this for many years and now they're trying to review this type of agreement. And I think that at this moment we're going to have a moment of uncertainty that will be a little more prolonged.

No, look again, we still don't know how it's going to end because there have been many changes in the short term, but if that table... The table that was published is going to be valid, and if everyone believes that it will remain valid for a long time, that is, if there is no uncertainty regarding it, we can say some things that will happen, right? One thing that will clearly happen is that the United States is very concerned about this rerouting business, right? Which is taking a product, for example, a Chinese product, going to Mexico, changing the packaging and selling it to the United States. Since the tariffs are very different, this backloading won't decrease, it will increase, because some places have 10%, others have 40%. Obviously, whoever is producing in the 40% place will prefer to put it in the 10% place, so that the 10% place can export to the United States under more favorable conditions. And another thing is that the United States, China is a large export market, right? It's trying to change to a consumption model, but it hasn't been, let's say, successful in this change yet. So, today China, India... Yes, China has some markets they need to supply their products, and the United States is a large market. So, if you close the United States, what large markets can compensate? You have Indonesia, Malaysia, and Brazil. India looks like... Brazil is just Alibaba, right? We consume and still... I like it. No, no. Electrifica has quite a lot, quite a lot, very intermediate. Yes, there's China. Yes, there is, quite a lot. And, but they want the United States, right? The United States is the market, a strong market, right? It's the market. But without the United States, you'll have to do more for Malaysia, more for Indonesia, more for Brazil. Since China has idle production capacity, cheaper products will come, right? So you have the good side that you have cheaper products and the bad side is that this can also cause an imbalance in the local industry, depending on how this happens.

They'll hold on. No, I think that if what's behind it is also really a matter of reciprocity, look, let's get to a point where you charge me the same as I charge you, we'll have to start negotiating. You look, for example, at that table that was just on the screen, those poorer countries that had a very high tariff, there are countries that can't even have a positive trade balance with the United States, because a neutral trade balance with the United States, because they are poor countries, they can't buy anything. They go there, for example, Nike, if you take Nike shoes, they are largely made, right? In these poorer countries and several other poorer countries and several other items. So I think these poorer countries have already started negotiating, there are already several reports of some wanting to negotiate. And the American government has already said... 'Look, if you come to reciprocity, I accept.' So now we're going to have this test, right? Ursula from Europe, who is the commissioner, has already said: 'Look, we can make a reciprocal agreement here with low tariffs.' Argentina is building a reciprocal agreement with the United States with the same tariffs for all products. So now we're going to test this thesis that the United States actually wanted reciprocity.

Yes, yes, yes, Europe has a more complicated model, right, Emilia, because Europe lived for many years with cheap energy from Russia, cheap or almost free security from the United States, or at least the United States paid a large part, and a model where it imported, right, under favorable conditions from China with, right, a benefit... from the Eurozone. Today, there's no longer cheap energy from Russia, nor will there be, and it also seems there won't be any more cheap or almost free protection from the United States, right? As it's an aging country, with very high government spending, meaning very high debt and declining productivity over time, it needs to reinvent itself. So, I think that today Europe is a place where people look and say: 'No, they need to reinvent themselves.'

Look, first, reindustrialization, which is restriction or protection and reciprocity, sometimes don't achieve the same goal. One thing leads in one direction and another in the other. And what we, I'm a liberal economist, believe is that each country has to be at its efficiency frontier. That is, I will do what I am most comfortable with. Efficient, and I'll exchange, right, with some other country or trade with what it's more efficient at than me. So, trying to reindustrialize depends on your aptitude, your efficiency, your workforce, your technology. Going against this natural trend actually makes the sector, the production chain, more expensive and makes you less efficient. Maximum efficiency would be if there were no tariffs, everyone produced what they do best, and everyone had a free trade agreement. I believe in that. Other people don't believe it, but I do. So, I think reindustrialization needs to... we need to see how that will happen. Now, reindustrialization, that is, protection for protection's sake, doesn't speak to reciprocity. These things may not achieve the same objective.

Look, I left the Central Bank recently, I'm in a period of quarantine, you can't talk, so I don't want to comment, but you can give a...

I don't want to comment, sorry, but let me say, I think the Central Bank is doing very well. I think the problem isn't with the Central Bank. Sometimes there's too much media attention surrounding the Central Bank. The Central Bank has a tool, which is interest rates, to achieve a mission given by it. The mission is given by the government. The government chooses the target, the government chooses the process. The government could, for example, change everything if it wanted to, but it doesn't. The government chose to set the inflation target the way it is done and it has a target. The government chooses the target. The Central Bank uses interest rates to achieve that goal, right? So, I think the Central Bank is doing a good job. I have no criticism of that. I don't want to comment on the short term because I don't think it would be good for me or the Central Bank, but I think we need to look at a longer period, right? A longer period than we've been in. Then we start to see that we have problems that aren't new, that have been around for some time. And we've been embarking on, let's say, a line of measures that have the same characteristics. And it's a characteristic that sometimes seems good in the short term, but it's not good in the long term, which is, look, I need to increase social spending, I want to help myself better, I want to help people more, which is great and needs to be done, but there also needs to be an exit strategy, right? When you stimulate demand, if I'm already giving money to people... Those who need it, those who will consume it. It's great, because people need to consume, but we need to know what the long-term implications of that are. So, if I always do this and since the government can't pay the bills, it needs to raise taxes. Where am I raising taxes from? I'm raising taxes on what we call the super-rich, which is the stock of savings, and I'm raising taxes on companies, right, on capital formation. So, if I'm always stimulating short-term demand and charging and using the money to pay for this, and the money to pay for it comes from investment, in the end I'll have more consumption and less investment. If we take this on a longer trajectory, more consumption and less investment means more inflation, right? So, if I continue taking measures that I always want to stimulate short-term demand, because it's a more short-term view, and those who will pay the bill are the stock of savings and capital, two things happen. I'll have more consumption and less investment, which means fewer products in the future. So, more consumption for fewer products equals inflation. Another thing that is happening is that I always put taxes on capital. So now, for example, I want to remove all taxes from labor. And if I remove all taxes from labor and put them on capital, when you're doing construction work on your house, it's reasonable to imagine that you'll have a lot of people with jackhammers and few machines, because labor is cheap and machines are expensive. When you have more units of labor for fewer units of capital, your production isn't very efficient. You can see that if you have a construction project with a lot of jackhammers and few demolition hammers, it won't be very efficient. Sometimes you might have just one person there with a jackhammer and they'll do the work faster. So I'm using this example because I think we're on this trajectory, right, of saying that I want to do, let's say, more social programs, social justice, which is very good and important to do, but I'm always paying the price with the capital side and the investment side. The only alternative to this would be for the government to invest a lot, but... The government doesn't invest much, it spends a lot. If you look at what investment actually is, it's very little. So we're kind of in this trap, right, in this situation that generates, let's say, a structural inflation going forward, and it creates a problem for us to be productive. So much so that if you take the agricultural sector and productivity in Brazil out of the equation, it hasn't grown much, it's even fallen, in recent years if you look at a longer average.

Here, look. I sleep really well, don't I? My wife always says that I sleep very well. Actually, my wife is a fan. My wife is here. She said that if I didn't come in a panic, she would kill me. Call your wife Adriana. How are you, Adriana? Receive the affection. Thanks for what you're seeing at the central bank. And then we think he's just a puppet. Give her R$100. Padri, she sent him. Thanks, [ __ ]. Thanks. Hey Roberto, thanks for participating too! So, I think that I don't have many problems sleeping. I always try to make the technical decision. I always try to rely on the decision-making, let's say, on the technical work done by others, to work as a team. Well, I had a phrase that I thought was really good, I had it framed and hung in the COPOM room that said that the authority of the argument is worth more than the argument from authority, right? So, that's exactly to make sure we work as a team, right, and that we encourage debate. And I like working with people who think differently from me, who challenge me. We had difficult moments during the pandemic, because what is difficult for a central banker? It's when he looks ahead and says: 'I don't know what's going to happen, and my model isn't prepared to predict it. My model doesn't know, it has no idea what's happening. People are at home, nobody is leaving home. You run the model, what will the growth be, what will the inflation be? Nobody knew, not only in Brazil but nowhere in the world, but we knew that there would be, let's say, a large response program, that is, and we have, let's say, two dimensions. First, the government would spend more, right, to help people, businesses, and central banks would lower interest rates, which would stimulate more credit, right? So that was done. So we were in that environment where we didn't know what was going to happen. People said there would be a global recession of unprecedented proportions. In the end, we look, right, after the fact, the fall in growth, not only in Brazil but in several countries, was much smaller than expected. Spending was also much larger than expected. It was a huge expense to think that the world collectively spent 11, 12% of GDP in 12 months, that never happened before. In the 2008 crisis it was four times less. And then you have to deal with it. Well, I solved a big problem here, which was the pandemic, but I have a side effect. What was the side effect? It was the largest synchronized inflationary process in many countries in many years, and Brazil was part of it, right? But so were several others. So I would say that the most difficult moment, for me, the most difficult moments are those moments when you have a lot of uncertainty and the variables you have and the models you have, you know that they won't work for that moment. So you have to think very outside the box.

I don't think so. I think that during the pandemic, there were some weeks when we met, the central banks, we looked at each other and said: 'How's it going to be, huh?' What's going to happen? What will be the impact on growth? What is the impact of people staying home? Nobody knew how adaptable the economy would be, you know. That was much better than expected, right? He even developed technological processes that are still useful today, right? That help people. How many video conferences do we have today? Yes, it wasn't common for me to spend the day doing video conferencing. Today it's natural and it's more efficient. Sometimes you're at home, and you have five or six meetings, and so on. So this happened. So I think now we have uncertainty regarding what the United States says is a search for reciprocity, which I hope is reciprocity, I hope it's not a protectionist thing, because then I think there will be more inefficiency. But if it's reciprocity, which is what I hear American economists talking about, I think we're going to have some noise, right? At some point it may stabilize in the lead. Communication was not good. I think the table left a lot of questions about what the real objective is, and now they need to explain it better. The government spends a lot of time trying to gain credibility, and then when it makes a mistake, it loses it very quickly, right? And when you lose too quickly, it takes you a little longer to win back. So I think there's a process now where we're trying to understand what's going to happen. Markets are becoming more volatile because they don't understand each other. And there's another thing that few people talk about: if the uncertainty is too great, the markets can make a plan that would even be good go wrong, because if the market starts to have a non-linear correction, that is, if it starts to go into despair, you start generating allocations in the economy resulting from what causes the plan not to work.

Look, the autonomy means you have a president who stays for 4 years, right, 2 years in each term, and there are eight directors. Each year the government can replace two directors, right? So, when I started at the Central Bank, I had the understanding that I would have complete freedom to work. So, I would choose the two directors, I would send the president's name there, sometimes he would call there, that's right, yeah, okay, bye. So, that's how I chose the directors for the first 4 years. I chose the directors even after gaining autonomy. When another government came and went, there was, obviously, and I think it's even reasonable, the government wanted to choose the directors that it wanted, it had the right to choose the directors. And the process was very, very, very smooth in that sense as well. He chose the directors. Sometimes the minister would say to me, 'Look, I'm thinking about this one, this one, what do you think, and so on.' He never had any major problems. The government made some choices that went through a debate, and there were some other choices that I learned about through newspapers and television; it's part of the autonomy. Remember that I defended autonomy, right? I helped create the project, so I can't go against a project that I myself helped to create. I think he's great. We were having a party just now to celebrate the 60th anniversary of the Central Bank, and there were ministers there, people from the Supreme Court, from the STF. And I looked at that and said, 'Wow, I'm happy about this party here. Why? Because I think the Central Bank is gaining institutional strength. I'm going to tell a quick story about the Central Bank of Peru, which is, I think it's a story I always tell, but it's interesting. So, there's a president of the Central Bank of Peru named Rulio Velard. He's a very good friend of mine, he's been there for 18 years. And if you look at those 18 years, Peru has already changed presidents. One committed suicide, another attacked someone, I don't know what. And he's still there, calm. And I tell him, Rulio, all this turmoil in the country during these years and you're still there, calm, nobody attacks you. He said, 'Look, in the first government transition there were some attacks, then people, Congress, society understood that an autonomous Central Bank was good.' And nowadays that's no longer an issue. The government argues, the ministers argue, but I'm here doing my job, which is technical. So I hope that we manage to reach that level of maturity. I think that this 60th anniversary event that just took place was an event in that sense of saying: 'Look, some people think one way, some people think another way, but the Central Bank is technical.' Whoever is in charge of the Central Bank's mission, they put Rúlio Velard's picture there now.

It's not a learning process, is it? This is the first time we've had an autonomous central bank that spans from one government to another, right? So, even the minister himself said: 'Look, this is the first time a minister will have to coexist with the president of the Central Bank, the Minister of Economy will have to coexist with the president of the Central Bank, whom he didn't appoint.' And I think this process has a learning process, but I think the government has learned one thing. When you attack the Central Bank, you undermine the Central Bank's credibility. However technical it may be, with the Central Bank under attack, there is doubt about the Central Bank's ability to respond, because it is an institution acting against an entire government. When you attack the Central Bank, the Central Bank's credibility falls, and the cost of bringing inflation back to the target is higher. So when the central bank, when the government attacks the central bank, it's like shooting itself in the foot, because it will make the cost of inflation convergence higher. In other words, you will most likely have to live with higher interest rates than you would if you had a more harmonious relationship with the Central Bank. So I think that lesson is being learned, right? Well, it's important to understand that the Central Bank is a technical body, it doesn't act politically, and when you attack the Central Bank and diminish its credibility, you make the cost of convergence higher.

Look, the president was the one who chose, right? The president of the Republic chose the president of the Central Bank. For many years there was a somewhat implicit agreement that the Central Bank had autonomy, but the decision-making power rested with the President of the Republic. If one day he understood that he should replace the president, he could replace him. There are some passages along those lines, including in Meirelles' book, right? Yeah, and then you have true autonomy. The autonomy is actually very good. Why? Because we live in the most polarized world. In the most polarized world. With true autonomy, you don't need to rely on the executive to follow what was agreed upon. It's written in the law, right? So, like this, ah, I'm going to, I'm going to let the president of the Central Bank go, I'm going to remove him. No, no, no, you don't even have the right to leave it there. That's what the law says. Unless you go to Congress and manage to overturn the law. So, the fact that it's in the law, I think, provides greater long-term stability. I think the transition from one government to another would have been one with greater market volatility if the Central Bank hadn't had its autonomy, right? You see, the Central Bank resisted, it faced many attacks, then I think there was a period of improvement. I think this is, you know, maturing. It's a process that's maturing, Mr. President.

Well, I think that, obviously there's no quick magic solution that will work in one or two months, but I think it comes down to stimulating supply and not demand, right? So, there's sometimes a very misconception that I see in many people who think that inflation is a supply-side phenomenon, and that growth is a demand-side phenomenon. So, if I stimulate demand, I will generate growth, because people will consume more, and because they are consuming more, others will produce more, right? It works very well that way in the economy, more or less the opposite. What I need is to stimulate supply, because by stimulating supply, I stimulate production, which ends up generating jobs, and then I have a level of income, let's say, in a more sustainable macroeconomic equilibrium to pursue growth without inflation. As I said before, much of the government's policies in recent times are more linked, let's say, to a political, electoral, and short-term vision. So, I'm going to stimulate demand. I will stimulate demand. Since I have no way to pay, I have to take it from somewhere, and I end up taking it from the productive sector, because I take it from savings or capital formation. So, we need to reverse this imbalance; we need to understand that we actually need more supply-side policies, and the government needs to spend less and invest more as well. So, there needs to be some adjustment involved. Today, Brazil's nominal debt is projected to grow by 9% per year. So, with your debt there at 9% per year, you, who have borrowed money, it grows by 9.5% per year. And then you try to implement cost-cutting measures to offset that 9.5% growth. A large portion, obviously, is interest, right? Because interest is included. So, if you don't strike a balance, or if you don't try to achieve what we call a primary surplus—which is trying to spend less than you collect in order to offset that growth a little—it will keep growing, growing, growing. So today, since this nominal debt is very large, the market is pricing it in, right? Let's say that the debt trajectory will be increasing, and therefore, when we look at long-term variables, both the long-term interest rate and the long-term real interest rate, they have a bit of this uncertainty priced in, created by a large debt, by high interest rates, and that makes the debt grow. Now, it's not enough to just say, 'No, so I'm going to cut interest rates.' Because if I cut interest rates, then I'll have more inflation, because I'll have a country that's growing faster than it can handle, which is your original question. And we can see this in many places. Aggregate demand is growing much faster than GDP. We have a greater need to import. Therefore, imports grow relative to exports. Keep in mind that when there's high demand and I can't produce it domestically, I have to import it. So all the variables that measure whether the country is overheating or not, that is, whether it's growing faster than its capacity, are like several little lights, and they all light up. So it shows that we need a balance where we produce more, whether it's more policies, just to finish, more policies to stimulate supply.

It takes a while, doesn't it? Well, it takes time and requires a lot of structuring. These are policies that need to have, you know, Congressional approval, and they need to be synchronized with the judiciary, because many things end up being litigated. But I think that's the way to go, right? I think that today the way forward involves thinking, looking further ahead, considering the longer term, not engaging in short-term politics, and focusing more on the long term.

I thought it was good. Strategy. I thought he had a brilliant idea. Sure, genius, no. Look, there are several countries that use the concept of core inflation, which is what we call the core, meaning you remove the things that are most volatile, right? And in many cases, it's about food and energy. The problem is that the Central Bank has a target, and in a country like Brazil, which is a poor country, food represents a very large expense in people's budgets. And it's not just food, food spreads. And it's also not true that inflation today is only about food. If you look at services, you're operating with high inflation. The last number was 0.96, meaning that when you have 0.96 annualized, it's monthly when you annualize it. And you also have the issue that if you have an inflation target that doesn't reflect what people feel in their pockets, there's a mismatch between what the Central Bank is doing and what the perception of inflation is. If I pursue an inflation target that doesn't reflect what people experience in their daily lives, it will start to erode trust and lose credibility in the work of the Central Bank. So, some countries do use this measure, but those are countries where there are two things. First, the energy value of food is much lower in day-to-day inflation. And these are countries that have a more stable inflationary trajectory. In Brazil, the market is very volatile, and communication between food, services, energy, and industry is much greater. And we don't recommend that this be done.

Yes, there's an easy way: the government spends more than it collects in revenue. So, if we take a closed system, imagine that all you had were four things to buy with a limited amount of money. If I spend more money to buy those same things, it will be more expensive. So, I'm giving a very simplistic overview here so people can understand. But in fact, when the government spends more than it collects over a longer period and is forced to issue or print money or issue debt, you enter this process, which is a process that has other imbalances. This isn't the only one; there are other imbalances, but it's important to understand that in people's minds, inflation isn't the general phenomenon of inflation. In people's minds, inflation is closely linked to something that economists like to call salient pricing. What is salient pricing? It's what you remember. So, for example, do you remember the picanha steak, do you remember the egg? Hey, in the United States, do you remember gasoline at the pump? In the United States, it's gasoline at the pump. If the price of gasoline at the pump goes up, everything else might be going up, but people think inflation is higher. So, there's this issue of salient prices, which is actually very well studied in economics, and which governments sometimes try to control, you know, to make it seem like inflation is a little lower. In other words, I have higher inflation, but let me control the prices so people notice. This also usually generates arbitrage, it's not a very efficient policy, but the way to explain it to people is: look, if someone takes on much more debt than they can afford to pay, the interest will be higher, right? And eventually, the person will have difficulty paying. So, in order to have lower interest rates, lower inflation, and sustainable growth, we need to balance the government's accounts. I believe there are other people who think differently, but I have a strong belief that this is the right path.