Monetary policy will take center stage next week with the two-day meeting of the Federal Open Market Committee (FOMC) starting on Tuesday and a decision on interest rates expected on Wednesday. Officials at the Bank of England (BoE) will hold their policy meeting Thursday. We can expect data on new and existing home sales for February, along with a PMI survey reading from S&P Global due on Friday. We’ll also receive the latest inflation readings from the U.K. and Japan.
Central Bank Meetings
Fed policymakers will gather on Tuesday and Wednesday for the latest meeting of the Federal Open Market Committee (FOMC)—the rate-setting committee of the U.S. central bank. Following the collapse of SVB and turmoil in the banking industry, the Fed could pause its rate hikes and hold interest rates steady. However, a majority of traders still project a hike of 25 basis points (bps), according to fed funds futures data collected by CME Group.1 The Fed has raised interest rates by a cumulative 450 bps, at the fastest pace in decades, since it first started tightening one year ago in an effort to curb soaring inflation.
The Bank of England (BoE) will hold its latest policy meeting on Thursday. BoE officials are expected to raise interest rates by 25 bps to 4.25%—the highest level since 2008. This week, policymakers at the European Central Bank (ECB) raised interest rates by 50 bps despite the uncertainty in the global financial sector, prioritizing bringing down inflation in the eurozone, which is currently running at an annual rate of 8.5%.
Amid heightened government scrutiny of TikTok, CEO Shou Zi Chew will testify before Congress next week. U.S. lawmakers have voiced concerns that the social media app’s parent company, ByteDance, is based in China and could be compelled to comply with the Chinese government’s data surveillance practices. Earlier this month, Congress introduced the Deterring America’s Technology Adversaries Act (DATA), which if passed could give the president authority to ban use of TikTok in the U.S.
February Home Sales
This week, we’ll receive data on new and existing home sales for February. Existing home sales likely rebounded to 4.18 million units last month, up from 4 million in January which marked the lowest figure since October of 2010. Sales have fallen for 12 consecutive months as mortgage rates rise and the housing market slows down. In January of last year, they totaled 6.34 million. Meanwhile, new home sales are projected to have fallen to 648,000, down from a higher-than-expected 670,000 units in January.