The US Federal Reserve is set to reinforce the view that it is not raising interest rates for a while as policymakers gather this week.
The US central bank is predicted to keep rates steady on Wednesday and potentially change its projections to show it hiking once or not at all this year. It is also to detail when it plans to stop reducing its balance sheet and Fed Chairman Jerome Powell is to talk to reporters.
“A further downward shift in the Fed’s dot plot will occur, but the median should still reflect at least one rate hike this year,” Bloomberg Economics’ senior US economist Yelena Shulyatyeva said.
“Recent remarks from policymakers suggest there could be new information about the balance-sheet unwind, including its size and timing. However, specific details concerning the assets in the portfolio are unlikely to be released at this stage,” Shulyatyeva said.
It is not alone in setting monetary policy this week, as policymakers in Taiwn, the UK, Brazil, Colombia, Iceland, Switzerland, Philippines, Indonesia, Russia, Thailand and Norway are all ready to gather.
None are expected to shift, but most should sound dovish in their outlooks at a time when the world economy is the shakiest since the financial crisis.
The outlier is Norway, which is predicted to lift its benchmark for the second time in six months as inflation consolidates above target.
Separately, German Chancellor Angela Merkel said that Germany and France hope to win over other EU countries to their ideas for a “European industry strategy” at a summit this week.
Leaders of the 28 EU countries are scheduled to hold a regular summit on Thursday and Friday.
Merkel said in her weekly video message on Saturday that she and French President Emmanuel Macron have proposed discussing the issue as they try to “secure jobs for the future in strategic business areas in Europe.”
Merkel pointed to “strategic research and innovation projects,” such as a German-French push to create a car battery cell consortium aimed at catching up with Asian rivals.
Additional reporting by AP
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