The Day at a Glance | February 26 2021

The Top

· House of Representatives in the US will vote on stimulus package today.

· Inflation (PCE) in the US accelerates to 1.5% annual in January (vs. 1.4% e.); income increased 10% with fiscal stimuli (vs. 9.5% e.).

· US Secretary of State Antony Blinken will have a call with Marcelo Ebrard to discuss the electrical power reform.

· The European Central Bank will act if the rise in long term rates affects the recovery: Schnabel.

· Industrial production in Japan grows for the first time in 3 months (4.2% monthly, Jan.); India exits recession (0.4% 4Q20).

Economic environment

The House of Representatives is expected to approve President Biden`s proposed stimulus package today. The legislative body controlled by Democrats will vote on the proposal that considers 1.9 trillion dollars that will extend unemployment aid until September and send checks worth 1,400 dollars to US households. The package also includes resources for the vaccination program, aid to local and state governments, credit to be given to small businesses and resources for the economy`s reopening. The House of Representatives has also included in the bill increasing minimum wage to 15 dollars an hour, even though there are still disagreements within the Democratic Party regarding this issue, and is highly likely to be rejected once the bill is passed to the Senate. Republicans are expected to oppose the bill in both chambers as they have criticized it for being too large and have accused it of allocating resources poorly. Republicans are opposed to the excessive amounts of aid to local and state governments; additionally, they consider that more resources should be allocated towards fighting the virus. Democrats control the House of Representatives, with 221 seats vs. 211 held by Republicans, which is why the bill`s approval is likely to occur today. However, there is division in the Senate (50-50) and the bill will probably undergo changes.