The Swiss star suffered a shock opening-round defeat against Nishikori before seeing off Thiem in straight sets in round two.
Two days after a surprising 7-6 (7-4) 6-3 loss Sunday to Japan's Kei Nishikori in his first match in Group Lleyton Hewitt, the third-ranked Federer on Tuesday came out on court at the O2 Arena eager to get back on track and quickly asserted his superiority, reports Efe.
He said: "It feels good, I'm very happy I showed a reaction after the last match against Kei".
But Federer, who stayed on course for the knockout stage and will play South Africa's Kevin Anderson today, refuted suggestions that he gets special scheduling favours from tournament chiefs.
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Earlier in the day, Anderson blasted his way to a 6-0, 6-1 win over Kai Nishikori to claim his second win of the ATP Finals.
"No match is easy here and it's not something I'm used to, losing and then coming back and playing again, but it's a great challenge and I'm happy with my attitude and how I played".
"So for me, it was really important to remind myself what a thrill it is to play here at the O2. Maybe it's the round-robin format that got to me", Federer said.
Two tame volley errors by Thiem gave Federer another break for a 5-2 lead as he cruised to the opening set.
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To start the second set, Federer played a couple of penetrating rallies, with the single hander working in full flow, and with a little help from Thiem's forehand, got the break immediately.
Anderson was brimming with confidence, being nearly untouchable on serve and made some powerful returns followed by loads of pulsating groundstroke to steamroll the Japanese No. 1, serving him a nice bagel and taking the opening set 6-0.
"That's amongst the matches best I've played", said Anderson. He also rarely made any impression with his signature weapon - the one-handed backhand.
Anderson looks nearly certain to reach the semi-finals even if he is beaten by Federer on Thursday.
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"And I don't think there's a tournament director in the world who is not going to take those factors into account when setting the schedule".