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Macroeconomic & Geopolitical

Central Banks Tread a Fine Line

11 March 2021 - 3 min read

We will watch the FOMC meeting to see how the Fed responds to the newest stimulus bill. In Europe, the ECB said it will increase the path of purchases through the PEPP. Finally, China’s annual NPC meeting reiterated the government’s stance toward longer-term structural reform.


Arrows indicate consensus forecast compared to the previous period. Local dates of release.


  • We will watch the FOMC meeting to see how the Fed responds to the newest fiscal stimulus bill. Labor market slack in the February jobs report and a tame CPI reading this week will give the Fed cover to remain accommodative, though they will likely raise growth projections.
  • Retail sales for February will likely ease following the January jump from stimulus checks. However, additional stimulus will provide more support over the coming months.


  • The Bank of England meeting scheduled for Thursday should keep policy rates unchanged. The question markets want answered is whether recent rises in bond yields are considered warranted by the BoE or not. And, what will the bank do about it? For now, markets expect mostly words but no change in asset purchase amounts and pace.

Asia Pacific

  • We will listen to the Bank of Japan’s comments from its meeting on Friday. The BoJ waited and watched as a selloff in bonds led the yield on Japanese government debt to rise. At this meeting, we watch to see if the central bank will allow a wider range of yield moves going forward, or if it plans to step in to prevent yields from rising too high.
  • China activity data for February will likely be noisy due to timing of the Lunar New Year.

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