The Day at a Glance | November 22 2021

The Top

*Clarida, Walter, and Bullard, FED members, could consider accelerating the tapering in December.

*Moody’s warns that Mexico’s electric reform could cause a credit rating downgrade for the country.

*Biden is expected to talk this Tuesday about economic growth and inflation.

*The Central Bank of China is willing to stimulate the economy in its last monetary policy quarterly report, after the strong slowdown in 3Q21.

*South Korean exports maintain double-digit growth in November (27.6% yearly), according to first estimates.

Economic environment

Biden will speak about the economy. Tomorrow, the President of the United States, Joe Biden, is expected to perform a public speech about the state of the economy and measures to control inflation. The announcement of his public appearance attracted the attention of the markets, as the administration has committed to revealing its candidate for president of the Federal Reserve before Thanksgiving, while direct actions by the government to reduce energy prices using crude strategic reserves, could be announced too. Tomorrow’s speech could be an ideal space to make both announcements, although it is not confirmed that this will be the case. The White House has not disclosed details about the specific content of the speech. The most expected decision is the FED one with Jerome Powell and Lael Brainard being the most popular candidates to get the job. While the election of Powell would indicate continuity in the Central Bank when the monetary normalization is beginning after the pandemic, Brainard has sympathized with Democrats progressive groups for her stance regarding a major financial regulation. Some market participants have warned that, if Brainard is elected, there will be volatility because of the leadership shift in a key moment for the monetary policy, given the inflation risks. For now, some members of the central bank have started to confirm that they will discuss in December (14-15) a possible acceleration in the tapering; among them, Richard Clarida (FED Vice-president), Christopher Walter, and James Bullard (FED St. Louis).