The Day at a Glance | January 27 2021

The Top

· FED makes first monetary policy of the year.

· Global debt increased in 19.5 trillion dollars during 2020 because of the pandemic: IIF.

· ECB will study if the Euro`s appreciation responds to differences in monetary policy with the FED.

· Economic indicators: Consumer confidence in the United States improves during January (89.3 vs 87.1 prev.).

Economic environment

The United States Federal Reserve will have its first monetary policy meeting of the year today. The central bank`s stance is expected to remain unchanged, with low interest rates at 0% and an asset purchasing program that will be maintained at 120 billion dollars a month. There are no expectations of the FED`s discourse being modified, however, it`s predicted that the bank will reiterate its commitment to an accommodative monetary policy until the crisis triggered by the pandemic has completely passed. Economic data has been mixed since the FED`s last meeting, with disappointing figures seen in consumption and employment. It`s highly likely that this will push the central bank to reiterate a message of monetary aid, even despite the developments regarding the distribution of vaccines and increasing expectations of seeing a rebound in inflation. The monetary policy decision will be published in a statement at 1:00 pm Mexico City time; half an hour later, Chair of the FED Jerome Powell will give a press conference. Markets expect Powell to repeat comments made in recent speeches and to confirm that there is no intention of pulling out the quantitative easing program in the near future. Moreover, it will be important to find out what Powell and the FED`s point of view is regarding mid-term growth expectations and possible risks of inflation after Biden`s administration has announced aggressive spending programs and that most of the US population is expected to be vaccine towards the second half of the year.