*Yellen admits she was wrong about inflation.
*A 50bp increase is necessary after record high inflation: Robert Holzmann, member of the ECB.
*South Korean exports increases more than expected during May (21.4% annual vs 18.4%e.), sign of strength in global demand.
*In the United States, consumer confidence fell to its lowest level in 3 months due to inflation.
*The FED will start reducing its asset balance sheet today.
*Economic indicators: The Manufacturing ISM will be made public in the US today; IMEF indicators will be made known in Mexico.
Inflationary problems. US Secretary of the Treasury, Janet Yellen, admitted in an interview with CNN that she had underestimated the path that inflation would take. She acknowledged that there have been shocks on energy and food prices, and bottlenecks that have severely affected the economy and didn’t fully understand last year when she assured that the problems with inflation in the United States would not be persistent. She ended her remarks by warning that the decrease in underlying inflation is good news, however new shocks that could keep inflation high cannot be discarded, especially those related to the war in Ukraine and economic shutdowns in China in previous weeks due to COVID-19. She assured that she backs the FED`s aggressive actions to contain the rise in prices. Her comments were made hours after she met President Joe Biden and Chair of the FED, Jerome Powell, in the White House. Biden also addressed the media and affirmed that he would respect the FED`s independence so it could take necessary actions to stop inflation. The President has made it his priority to control the increase in prices, which affects American families. Biden and the Democrats face the challenge of maintaining fragile majority in the House of Representatives and the Senate during midterm elections this year; but Biden`s approval has dropped to the lowest level for any President at 500 days in office (40.5%). Meanwhile, the public`s confidence in Jerome Powell and the FED has also fallen, as inflation has lowered quality of life and the response (higher interest rates) threatens to cause a recession. This was Powell`s third in-person meeting with Biden as the President and the FED`s Chair try to fight the highest rate of inflation in the last 40 years.