The Day at a Glance | September 22 2021

The Top

*FED will make a decision this afternoon.

*US Senate threatens to reject project approved by Representatives, which considers suspending the debt ceiling until Dec. 2022 and financing the government.

*The United Kingdom weighs joining US-Mexico-Canada trade pact after not making any progress with a free trade agreement with the United States.

*Economic indicators: Consumer confidence figures in Europe are expected to be made public (-5.9 e. Sep.).

Economic environment

The FED will hold a monetary policy meeting today. In this week`s most important event, the United States Federal Reserve will have a meeting today (1:00 pm Mexico City time) and will make a monetary policy decision. No change is expected to be made to the bank`s current stance (Federal Funds rate range at 0%-0.25%; purchases of 120 billion monthly dollars), however, its statement is expected to give signs of a gradual withdrawal of its purchases program towards the end of the year; even though a formal timetable is not expected to be announced today. Nevertheless, markets will be mindful of any surprises since last week, various members assured that they expect to reveal details of the withdrawal of the quantitative easing program soon. Additionally, the FED will publish its new macroeconomic estimates, in which some market agents consider that a rise in interest rates could be moved up from 2023 to 2022. In the most recent forecasts, which were published in June, 7 of the 18 members thought it would be wise to increase rates starting in 2022, and it`s possible that more members could have joined their opinion considering that inflationary surprises this year will surely increase mid-term inflationary estimates. Chair of the FED Jerome Powell will hold a press conference half an hour after the Federal Reserve makes its decision public – he`s expected to reiterate the bank`s intentions to withdraw stimuli. A statement, forecasts or comments made by Powell that lean towards a more hawkish stance (willingness to normalize the monetary policy before than expected) could increase volatility in markets and favor the US dollar.