Flávio Bolsonaro is forging ahead with his campaign for Brazil’s presidency after a chaotic week marked by fresh legal trouble and an uneasy truce with his stepmother.

Bolsonaro’s Liberal Party officially nominated the senator on Saturday at a national convention in Sao Paulo, with allies including Argentina’s Javier Milei in attendance.

The son of former President Jair Bolsonaro formally enters the race trailing President Luiz Inácio Lula da Silva in polls and trying to move past a family feud with former first lady Michelle Bolsonaro that exploded in late June.

His campaign has never fully recovered from the effect of audio messages leaked in May that showed him soliciting funds for a film about his father from Daniel Vorcaro, the man at the center of a massive bank fraud probe. On Thursday, a Supreme Court justice authorized police to investigate the matter, just a day after Bolsonaro faced separate allegations involving Banco Master.

Bolsonaro, who has denied any wrongdoing, has yet to pick a running mate or secure alliances with influential centrist parties. It’s all fueled a sense of turmoil around the campaign that has left some investors and analysts thinking that Brazil’s most powerful conservative family is about to gift wrap a victory for Lula.

While markets largely shrugged off the news, it generated discussions among money managers at an annual event hosted by investment manager XP Inc. in Sao Paulo.

“This is a very turbulent candidacy, there’s a lot of bad news on top of him,” said Renato Jerusalmi, founding partner and portfolio manager at Riza Asset Management. “The right is very fragile.”

Two bank executives who asked not to be identified expressing their private views on the election said they thought the race was essentially over unless Bolsonaro drops out. But one described that scenario as wishful thinking as long as Jair Bolsonaro, who is on house arrest for plotting a coup after losing to Lula in 2022, sticks behind his son.

Others suggested that little about the overall dynamic changed. Lula has held a polling lead since Bolsonaro was first tied to Vorcaro and remains the favorite, but his victory isn’t yet guaranteed, multiple investors who also requested anonymity said.

Much of the nation’s business elite have been eager to see Lula lose after four years of spending that’s pushed the nominal budget deficit to nearly 10% of gross domestic product and led to rising debt levels.

Lula has this year unleashed stimulus to boost the economy and his chances of victory. That’s added to fiscal concerns while complicating the central bank’s attempts to control above-target inflation even with one of the world’s highest benchmark interest rates.

Mixed signals from within Lula’s Workers’ Party have fueled uncertainty about how the 80-year-old leftist would govern if wins, especially without reelection concerns.

Finance Minister Dario Durigan sought to tamp down those fears, which flared again after a top member of the party touted fiscal expansion and minimum wage hikes in investor meetings last week.

The government will do “whatever it takes” to improve public accounts, Durigan said at the Expert XP event Friday, expressing concern about debt and calling fiscal policy “the cornerstone of a strong country.”

Lula is likely to present his plan for another term next week, according to people familiar with the situation. But the expectation is that it will offer general guidelines rather than detailed plans, the people said.

Bolsonaro has promised fiscal discipline should he win but disappointed many investors at his first major banking event as candidate.

The campaign recently deployed economic adviser Daniella Marques on a tour of Brazil’s financial sector. Marques served as an adviser to Economy Minister Paulo Guedes during Jair Bolsonaro’s presidency before leading state-owned bank Caixa Econômica Federal.

She has said that spending reductions equal to 1.5% of GDP would restore fiscal credibility, although the campaign has yet to detail its economic plans.

Marques appeared on stage at the event, along with other key conservative figures like Sao Paulo Gov. Tarcísio de Freitas, whom many investors saw as an ideal market-friendly challenger to Lula before Bolsonaro entered the race.

Michelle Bolsonaro didn’t attend the convention but appeared in a pre-recorded video in which she mentioned her stepson just once, asking God to bless him and his campaign.

Milei, who’s backed Bolsonaro in an effort to continue a wave of conservative electoral momentum across South America, urged attendees to “make Brazil great again.”

A Datafolha poll released Friday found Lula leading Bolsonaro by 5 points, 48% to 43%, in a runoff scenario, little changed from the prior two months. It was conducted Wednesday and Thursday, amid the flurry of news.

“The fiscal outlook is terrible, but the car is going to hit the wall next year,” Jerusalmi said. “Whoever gets elected will have to deal with it.”

( Felipe Saturnino, Raphael Almeida, Martha Beck, Barbara Nascimento, Daniela Milanese and Mariana Lumy contributed to this report.)

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