Good Start

By Isaac Cohen*

After the steep fall of last December, the markets started the year with renewed strength, posting the best January performance in the last thirty years. The main contribution to the reversal came from statements by Federal Reserve members that they could be patient, given adverse global economic and financial circumstances and muted inflation pressures. In other words, further increases in the federal funds interest rate will have to wait for clearer signals above all of inflation.

The stock market reacted vigorously. The main stock indexes posted solid January performances, the best since 1989 for the Dow Jones and since 1987 for the S&P 500. The impact was also felt in world markets. The dollar weakened and several emerging market currencies strengthened, such as the Russian ruble (5.8 %); the South African rand (5.4 %); the Brazilian real (4.1 %). In all, the MSCI index of emerging market currencies increased 1.9 percent in January.

The good news led to an invitation to dinner at the White House from President Donald Trump to the Chairman of the Federal Reserve Jerome Powell, indicating less tension between both. However, despite these positive signals, the risks to the outlook persist. Among them the slowdown in China, Europe and Japan, the trade tensions between China and the United States and the threat of another government shutdown in Washington.

*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.

About Ramón Jiménez

Ramón Jiménez, Managing Editor de MetroLatinoUSA.Com (MLN). Graduado de la Escuela de Periodismo de la Universidad del Distrito de Columbia (UDC). Email:

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