An expected Federal Reserve rate hike highlights a busy week of economic news. While a rate increase is virtually certain, economists will be looking to see whether Fed officials bump up their forecasts for hikes over the next couple of years now that inflation and business confidence are picking up. The week also features reports on inflation, retail sales, housing starts and industrial production.
Fed policymakers signaled last week that a rate increase is likely at a two-day meeting that ends Wednesday. A move was all but guaranteed by Friday’s strong jobs report, which showed 235,000 payroll gains in February, as well as faster wage growth and a drop in the unemployment rate to 4.7%. More suspense surrounds Fed policymakers’ projections. Economists generally believe the central bank’s median estimate will continue to call for three quarter-point rate increases both this year and in 2018. But there’s some risk that gets pushed to four as inflation nears the Fed’s annual 2% target and business confidence keeps juicing markets in anticipation of President Trump’s plan to cut taxes and regulations.