The Day at a Glance | January 26 2022

The Top

*The FED will make a monetary policy decision this afternoon.

*Mexico`s retail sales increased more than estimated during November (0.9% monthly; 5.4% annual).

*Bien considers putting Putin at risk of personal sanctions over Ukraine.

*China starts a 2022-2024 anti-laundering money program.

*Japan`s Central Bank`s meeting minutes revealed that inflation could reach 2%, but there is preference to maintain stimulus.

Economic environment

Decision in the FED. This afternoon (1:00 pm Mexico City time), the Federal Reserve will make a statement regarding its monetary policy decision after having a meeting yesterday and today. Markets expect the FED to confirm that an increase in rates is guaranteed to take place in the Federal Reserve`s next meeting in March, while greater clarity is expected concerning the central bank`s balance of assets. Market players are preparing for the possibility that the FED could announce an acceleration in the withdrawal of the purchasing program – for it to come to an end in February instead of March, which would give rom for the increase in rates to start in March. Apart from this, no change is expected to be announced regarding the bank`s monetary stance. The guidance that the FED will share regarding its monetary policy today will be key for markets to adjust their expectations. Chair Jerome Powell`s press conference will be particularly important since he`s expected to tell markets if the FED is planning on carrying out 4 interest rate increases in 2022 (vs. recent forecasts that expect 3) and share discussions about the pace and time of the withdrawal of liquidity from debt markets. However, it`s highly likely that Powell will avoid any specific questions and will not commit the FED to a precise trend in rates or a specific balance; he`ll try to maintain flexibility in the bank`s stance.