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(Bloomberg) — Jerome Powell and his fellow Federal Reserve policy makers are expected to signal their first interest-rate hike since 2018, paving the way for a March move as the U.S. central bank tries to extinguish red-hot inflation.

Financial markets in the coming week will get another read on U.S. inflationary developments when the government issues employment cost data for the fourth quarter. Economists project another solid increase in wages and benefits after the index jumped by a record 1.3% in the prior three months.

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A separate report is expected to show that U.S. economic growth accelerated at the end of 2021 after a mediocre third-quarter performance, fueled mostly by a pickup in inventories and a modest gain in consumer spending. 

Powell and his colleagues have hastened their withdrawal of pandemic support in a hawkish pivot to control price pressures, even as the omicron variant of Covid-19 has hampered economic activity in the early weeks of the new year. 

Economists expect them to conclude the Fed’s bond-buying program on schedule in March, and also raise rates from near zero at their meeting that month. Some say that an aggressive half-percentage-point hike is warranted to bolster the central bank’s inflation-fighting credentials.

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What Bloomberg Economics Says:

“The main goal of the meeting is for the FOMC to telegraph a March rate hike and balance-sheet runoff this year, and we expect it will do so cautiously — emphasizing the uncertainty and downside risks to growth, given that we are still in the middle of the omicron wave..”

–Anna Wong, Yelena Shulyatyeva, Andrew Husby and Eliza Winger. For full preview, click here

Elsewhere, the International Monetary Fund publishes its latest outlook, which the organization has warned will see downgrades of previous projections for global growth because of the late-2021 resurgence of the coronavirus. The Bank of Canada may start a year-long hiking cycle to bring three-decade-high inflation under control, and its counterparts in South Africa, Hungary, Colombia and Chile are predicted to raise rates too.   

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Click here for what happened last week, and below is our wrap of what’s coming up in the global economy.

Europe, Middle East, Africa

GDP readings on Friday from Germany, France and Spain will show how badly the omicron variant hit the recovery in the fourth quarter. Germany is certain to have contracted, setting Europe’s biggest economy up for a recession. The other two are expected to still be growing, yet at a slower pace than in the previous three months. 

Meanwhile, economic confidence and PMI data will provide an early indication if the euro area picked up this month or remained subdued. GDP and inflation readings for the region are due the following week. 

Hungary holds its monthly rate decision on Tuesday, followed two days later by a weekly rate decision. Markets are expecting the central bank to provide more clarity on how policy makers weigh a rally in the currency against a bleaker inflation outlook.

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It will be a busy week for African central banks, with five institutions gathering for their first rate meetings of the year. Nigeria, Mozambique, Kenya and Angola are all predicted to stand pat. In contrast, South Africa is likely to raise borrowing costs, sticking to the aggressive rate-hike trajectory that its modeling shows, after inflation moved closer to the top of its target range last month.

Kuwait is expected to unveil its budget, which should show a narrower deficit thanks to higher oil prices, and a cut in spending as the government aims to tighten its belt through the slow pandemic recovery.

For more, read Bloomberg Economics’ full Week Ahead for EMEA

Asia

South Korea releases growth figures Tuesday that are likely to show the economy expanded at a faster pace in the fourth quarter, helped by continued strength in exports and an improvement in private consumption before the onset of omicron. 

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Early PMI data showing factory activity in Japan will offer a clue as to how the virus is impacting production at the start of 2022. Inflation in Australia is expected to remain elevated, giving the central bank food for thought as it considers the future of its bond purchases. 

The Bank of Japan will release a summary of its January meeting that may shed more light on its thinking on inflation, after it only nudged its forecasts up fractionally. Tokyo CPI out Friday is likely to show further momentum in the country’s inflationary trend, pointing to more cost pressures for businesses despite the BOJ’s assurances that there’s no need to fear inflation shooting up. 

The Philippines, Hong Kong and Taiwan all report GDP, while central bankers in Kazakhstan and Pakistan gather to set rates.

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For more, read Bloomberg Economics’ full Week Ahead for Asia

Latin America

Mexico’s central bank has forecast that inflation would peak in the fourth quarter. Look for data out Monday to support that call: analysts see mid-January inflation extending a slowdown that began in December. 

On Tuesday, analysts see Mexico’s November economic activity figures showing their first rise since July, though more than a few suspect Latin America’s second-biggest economy ended 2021 in recession. Retail sales for the same month are also seen posting positive results given momentum in same-store sales.

Argentina’s economy has few drivers and a host of headwinds, so many see a second straight negative print for the GDP-proxy data out Tuesday. Brazil’s mid-month inflation reading may fail to slow as much as December’s full-month data, but the long trek back to target appears to be under way.

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With inflation well above target, look for Chile’s central bank to raise its key rate for a fifth straight meeting to 5%, with more hikes still to come. Reports out Friday may show that Brazilian unemployment fell to a pre-pandemic level in November while the broadest measure of the country’s inflation remains more than twice its early 2020 level.

Colombia’s central bank on Friday looks set to accelerate tightening with a 75 basis-point hike to put the key rate at 3.75% as inflation has jumped above target.

For more, read Bloomberg Economics’ full Week Ahead for Latin America

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