The Day at a Glance | August 3 2021

The Top

*Positive employment data in the next two months would be enough to back the gradual withdrawal of the purchasing program in September: Christopher Waller, member of the FED`s Governing Board.

*IMEF indicators show a loss in momentum in the Mexican economy during July; services slowed down.

*Consumer confidence in Mexico stabilizes after returning to pre-pandemic levels (44.3 Jul.).

Economic environment

The FED`s withdrawal of purchases could start in October. In an interview with CNBC, Governor of the Federal Reserve Christopher Waller assured that he would back the announcement of the withdrawal of the asset purchasing program in September and start carrying this out in October if employment data shows good enough improvement in the next two months. Other members of the FED, like Bullard and Kaplan, have showed a similar stance, which seeks to start the withdrawal of stimuli in the fall. Waller assured that the process could start as soon as October and could take between five and six months to completely withdraw the central bank`s purchases, which would possibly lead to higher interest rates starting at the end of 2022. Nevertheless, the greater part of the FED`s members, including Chair Jerome Powell, would rather take a more patient route, and discussions remain indefinite. In fact, data shows that hiring has become weaker in July, particularly in regions of the country where unemployment benefits continue and the virus`s Delta variant keeps spreading. Less of a firm recovery in employment could delay the FED`s plans. This Friday, final employment figures for July will be made known; estimates expect the number of jobs to have been created to set between 950 thousand and 850 thousand.