The article examines how Brazil's fiscal policy has been perceived by 'bond vigilantes', who are key players in the financial markets that hold government bonds and assess the country's creditworthiness. It mentions the initial success of the fiscal policies during the previous administration, particularly the approval of pension reform in 2019. However, it highlights a deterioration in fiscal management that began towards the end of 2019 and worsened significantly in 2021, leading to a negative assessment of Brazil's long-term fiscal solvency.

Despite differing opinions among analysts, the author suggests that the perspective of bond vigilantes aligns with their views that the fiscal legacy left by former President Bolsonaro has been unfavorable. This reflects concerns about Brazil's financial stability and ability to meet future obligations, particularly in light of rising bond yields. The comparison of Brazilian bond rates to those in the U.S. indicates increasing skepticism among investors regarding Brazil's fiscal health.

The implications of these evaluations are crucial for Brazil's economic outlook, as rising costs of borrowing could hinder investments and fiscal measures needed for recovery. The bond vigilantes' scrutiny serves as a barometer for investor confidence in government policies, underscoring the importance of a cohesive and sustainable fiscal strategy moving forward, particularly in the context of post-pandemic recovery efforts.