The Day at a Glance | January 13 2022

The Top

*Daly and Harker, member of the FED, agree with calls to increase interest rates starting in March.

*Inflation for producers stabilized in December in the United States (9.7% annual); underlying inflation surprised to the upside (0.5% m/m; 8.3% annual).

*Lael Brainard, nominated to be Vice Chair of the FED, will testify at her confirmation hearing.

*The German Wholesale and Foreign Trade Association warned about the Omicron variant`s disruptions on production chains.

*Inflation in Russia accelerated to 8.4% annual in January despite aggressive increases in interest rates in 2021 (425 bp).

*COVID-19 hospitalizations reached a new record in the United States; California, New York and New Jersey among the most affected states.

*Biden will send military medics to some states in order to back medical attention services after the rise in hospitalizations.

*China detects new COVID-19 cases in the city of Dalian; congestion increases in the Shanghai port.

Economic environment

Members of the FED confirmed an increase in rates in March. Throughout the week, members of the Federal Reserve have confirmed that they back the beginning of interest rate increases starting in March. Mary Daly of the San Francisco FED, and Patrick Harker of the Philadelphia FED, have been the most recent members to speak about the normalization of interest rates. Daly assured that inflation is “uncomfortably” high and the FED should act soon for it to not affect U.S. consumers, which is why increases could start in March. Daly had had a more patient stance regarding monetary normalization up until last year, but the fast increase in prices has forced her to rethink her position. Harker, for his part, said that he would be willing to back at least 3 interest rate increases in 2022, starting in March. This morning, the FED`s Vice Chair nominee, Lael Brainard, will testify before the Senate as part of her ratification process. Brainard is expected to reaffirm that the FED`s main objective is to contain inflation and have it return to 2% levels while not affecting the country`s economic recovery.