The Federal Reserve, the Bank of England and the European Central Bank are just three of the global central banks gearing up for their final meeting of the year next week, amid soaring inflation.
And concerns about Omicron. US stocks are back to record highs, but there is still room for fresh volatility following last week's sell-off. Meanwhile, economic data, including reports on producer prices and retail sales, will be in the spotlight with the Fed likely to move closer to a rate hike. Here's what you need to know to get your week started.
The Fed will hold its last meeting of the year on Tuesday and Wednesday and Chairman Jerome Powell and his colleagues are expected to discuss accelerating the bank's $120 billion-a-month decline. center.
In November, the Fed began cutting its stimulus program at a pace that could put it on track to complete its cut plan by mid-2022. Analysts say the Fed accelerates the pace. the process could end in March, clearing the way for two rate hikes expected in 2022.
Investors will also be on the lookout for any signs that the Fed is growing increasingly concerned about inflation, which Powell said can no longer be described with the word "transient." Data on Friday showed consumer prices rose at their fastest rate in nearly four decades last month, underscoring expectations of higher interest rates.
The BoE and the ECB will announce their final monetary policy decisions of the year on Thursday, and both are likely to impact markets.
The uncertainty over the Covid-19 Omicron variant means the BoE is now expected to hold off on raising rates until February.
The employment and inflation data will provide UK policymakers with insight into the strength of the economy ahead of Thursday's meeting, with inflation forecast to hit its highest level in years. a decade.
