From the data announced yesterday, April’s CB consumer confidence index increased significantly from 109 to 121.7, while the current situation rose from 110.1 to 139.6. The expectation index increased from 108.3 to 109.8. While the expectation of the market was largely exceeded, it was seen that consumer confidence reached its highest level after the pandemic period. The serious bounce in the last 2 months gives hints that the recovery in the economy was getting stronger in early 2Q21. The developing labor market, economic incentives, acceleration of the spread of the vaccine, easing of restrictions and opening of businesses are the main lines of this improvement. The economy will continue to grow as recruitment picks up and vaccination progresses. Reducing social constraints and opening up will also give consumers even more room to spend the savings they have accumulated during the pandemic.
We’re watching the Fed statements today. The main expectation is that the Fed will normally want to follow economic developments a little more while going for a “tapering” process. In other words, a very hawkish meeting is not a “base scenario” at least for the month of April. Ultimately; When the Fed will see the development in the employment sector and economic recovery at “good enough” levels, then will move to the “tapering” stage and inform this. However, for now, tightening and reducing QE seems not to be on the table. Of course, the fact that the role of the epidemic in the economy has decreased and economy’s better position does not prevent the Fed from evaluating this situation after June, and the main course is in that direction.
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