The Day at a Glance | January 11 2022

The Top

*Jerome Powell will speak before the Senate today as part of his ratification process as Chair of the FED.

*Industrial activities in Mexico decreased (-) 0.1% during November (+0.7% annual).

*In November, inflation among OECD member countries reached its highest level since 1996.

*The FED could need to increase interest rates as soon as March and decrease its balance of assets in order to contain inflation: Raphael Bostic, Atlanta FED.

Economic environment

Jerome Powell will speak before the Senate. This morning, a hearing will take place to confirm Jerome Powell as Chair of the Federal Reserve before the United States Senate. The Senate`s Banking Committee will deliberate Powell`s ratification as head of the FED for a second 4 year period. It`s likely that legislators and investors will be focused on his comments regarding monetary normalization and inflationary risks. Powell is expected to emphasize the use of monetary policy tools to avoid inflation from becoming an endemic issue, reinforcing his message of a faster process of monetary normalization. According to notes made public by the FED, Powell will also make reference to the economy prior to the pandemic and the current one, and the importance of the steering of the country`s monetary policy. Additionally, several members of the FED will give speeches throughout the week in which they are expected to confirm that the FED will start to increase interest rates in March.

Industrial production receded in November. According to figures made public by the INEGI, industrial activity in Mexico decreased (-) 0.1% during November after declines were logged in utilities (-1.2%) and construction (-0.6%), a standstill in industrial manufacturing (0%) and moderate growth in mining (0.4%). At an annual rate, industrial production logged a 0.7% rate of growth, led by a recovery in mining (1.7%) and manufacturing (1.2%); while contractions were recorded in utilities (-1.6%) and construction (-1%).