The week of great impact begins this Wednesday with the announcement that Fed officials will make after the FOMC meeting.
This is the meeting agreed to evaluate the evolution of the economy and the direction of the decisions that will be made for the United States.
The event is full of expectations, as they are expected to announce the beginning of the gradual reduction of the massive monthly purchases of bonds and securities from this Wednesday.
In turn, the focus will be on Powell’s press conference. Although Powell is likely to refrain from reporting on the rise in interest rates, inflation data is expected.
One of the key axes in the recovery and the fundamental factors that the FOMC committee relies on to make the decision are employment and inflation. Faced with current non-transitory inflation, speculation in the markets about an upcoming rate change in 2022 could increase.
If this occurs, we could observe an acceleration in the reduction of bond purchases and, consequently, an early start in changes in interest rates. Powell has previously mentioned that tapering would begin first with reduced purchases and then changes in interest rates.
Although employment has not yet achieved a full recovery, the data remains positive. Expectations for labor market growth and a drop in the unemployment rate are even stronger.
Therefore, the interest rate is projected to remain at 0.25%.
Another data that tomorrow could contribute to volatility, are the data of the PMI of Services of the United States. The report is expected to be positive, with projections of reaching 61.9 points.