FOMC minutes

The Federal Open Market Committee of the US Federal Reserve will release the minutes this Wednesday. The President of the Fed, Jerome Powell will speak on the matter under a moderate speech.

It is contextualized in a recovering economy with the result of the implementation of the stimulus plan promoted by Joe Biden, in the increase in inoculations and seasonal changes that permeate the restrictions and drive both consumption and production.

Taking into account that the projection on inflation is around 2%, the changes in inflation rates in recent weeks and, in addition, measurements on bond yields, are two issues that will be taken into consideration for the next announcement.

The most positive results on employment in the last week had a direct impact on the benchmark ten-year Treasury rate, taking it to 1.71% this Monday.

Given the performance in recent weeks on economic growth, job growth and accelerating inflation, it is likely that next half year, economic activity will be more optimal than expected. However, there is speculation about a change in the measures taken by the agency, despite the fact that inflation growth is seasonal. Attention should be paid to the new stimulus program promoted by the current President, which estimates a monetary injection of two trillion dollars.

These economic results are likely to derive from the Fed’s decision to advance, for example, the increase in the interest rate. Although no major changes are foreseen in the short term, this possibility and renewal in the purchase of bonds will be taken into consideration.

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