Markets boosted and pulled forward rate hike expectations following the FOMC's hawkish shift, with three hikes priced for 2022. While our baseline outlook sees the Fed tightening this year, we believe it will remain accommodative, so growth doesn’t slow too much and derail the recovery.
Arrows indicate consensus forecast compared to the previous period. Local dates of release.
- Housing market data should show continued strength in the sector, supported by impressive demand and limited inventory.
- We will watch Q4 earnings season to see how profits faired amid both elevated inflation and consumer demand.
- U.K. inflation data for December may give insight on the impact of the latest COVID wave on the economy.
- The U.K. unemployment rate will show if workers are affected by rising COVID cases, and the earnings release will indicate whether wages are following inflation growth.
- China activity data for December could show the impact of regional outbreaks on consumption, while production likely held up. China 4Q21 GDP may also continue to moderate.
- The January BOJ meeting is unlikely to reveal major policy changes, but focus will be on how the BOJ reacts to steadily rising inflation expectations.