Brazil's central bank chief says US election driving pressures on long-term interest rates

       WASHINGTON, Oct 25 (Reuters) -
    Brazil's central bank chief Roberto Campos Neto said on
Friday that markets are increasingly factoring in the "highly"
inflationary impacts of the U.S. election on long-term interest
rate futures.
    Speaking at an event hosted by Itau on the sidelines of the
IMF and World Bank annual meetings, Campos Neto said worries
about the U.S. inflation outlook were heightened by growing
market bets that Republican Donald Trump would beat Democrat
Kamala Harris.
    He said both U.S. campaigns include fiscal expansion
elements. Proposals for protectionism and shifts in immigration
policy also could have inflationary implications, he added.
        Regarding Brazilian inflation, he said the latest figure
was marginally worse, but called the government's announcement
on Friday of lower energy tariffs in November good news that led
many economists to revise estimates.

        Consumer prices reached
    4.47%
     in the 12 months to mid-October, compared to a 3% official
target with 1.5 percentage points tolerance margin either side.

        He reiterated that the country needs positive and
structural fiscal developments to reverse the recent increase in
risk premiums, highlighting the
    prospect
     of such announcements following municipal elections at the
end of this month.

        According to Campos Neto, much of the risk premium in
the yield curve is currently tied to fiscal concerns, but
Brazil's public accounts situation is not worse than that of
many other countries, with long-term interest rates showing
prices inconsistent with fundamentals.

        Campos Neto said the central bank remained determined to
pursue its inflation target.

        The bank's upcoming policy meeting is scheduled for Nov.
5-6.
    Economists expect
     an accelerated rate hike of 50 basis points, following a 25
basis-point increase in September that raised the interest rate
to 10.75%.


 (Reporting by Marcela Ayres
Editing by Chris Reese and David Gregorio)