The 10-year Brazilian government bond yield jumped toward 14%, its highest in a month, as markets rapidly repriced a worsening mix of fiscal risks and persistent inflation that together raise borrowing costs and shrink appetite for long-duration paper. Policymakers’ talks about costly measures such as a nationwide elimination of public transport fares have crystallised fears of bigger deficits unless fully offset, while reports of contingent calls on the budget for state-controlled firms have added to concerns about headline public liabilities. At the same time headline and core inflation remain stickier than expected and the policy rate sits at 15%, which keeps real rates and the term premium elevated and makes any move to tighten fiscal funding more expensive. Finally the structure of Brazil’s debt, with a large share linked to floating or indexed rates, amplifies the fiscal sensitivity to higher yields and forces investors to demand higher compensation for duration and credit risk.