Economy Week Ahead: Retail, Central Banks, Home Sales

Wednesday

U.S. consumers have been resilient through most of the pandemic, facing down product shortages, rapidly rising prices and Covid-19-related restrictions on where they could shop. Retail-sales data for February are expected to show the second consecutive month of increased spending as households adapt to the crosscurrents of a strong labor market, falling coronavirus cases and inflation running at the highest annual rate in 40 years.

The Federal Reserve is on track to raise its benchmark interest rate for the first time since 2018 as officials look to cool demand and control inflation. The central bank is navigating an unusually complicated environment of a tight labor market, supply disruptions, spiraling inflation and now Russia’s invasion of Ukraine, which has clouded the outlook and worsened price and supply-chain pressures that many had hoped would soon ease.

Thursday

The Bank of England has raised interest rates twice since December in an effort to tame accelerating inflation. Many economists expect another increase this week, though Russia’s invasion of Ukraine has spurred sweeping sanctions, further disrupted supply and sent commodity prices soaring—threatening both slower economic growth and even higher inflation, and leaving the policy outlook less certain.

Friday

The Bank of Japan is expected to keep its ultra-easy monetary policy in place, given concerns over how the war in Ukraine will affect the global economy. Unlike in the U.S. and Europe, consumer prices in Japan haven’t risen sharply so far.

At the start of the year, Americans rushed to purchase homes in the face of record-low inventory and climbing mortgage rates. Economists expect that the market for existing homes cooled slightly in February. Demand is still strong, but the number of houses for sale is limited, prices are rising and loan costs increased last month.