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Welcome to Wednesday, Americas. Here’s the latest news and analysis from Bloomberg Economics to help you start the day:

  • Federal Reserve policy makers are poised to signal plans on Wednesday for their first interest rate hike since 2018
    • Bloomberg Economics expects the Fed to cautiously telegraph a March rate hike and balance-sheet runoff this year
    • A barrage of upcoming data on the U.S. economy, wage growth and prices is poised to turn up the temperature of an already-heated debate about the persistence of inflation
    • Nearly 8 in 10 Americans expect inflation to increase over the next six months, according to a Gallup poll
  • Investors expect the Bank of Canada will start an aggressive series of interest rate hikes
    • Bloomberg Economics expects the BoC to hold and says it’s likelier to lay the groundwork for an imminent normalization cycle
  • Chile’s central bank is also in action on Wednesday and could deliver its third straight interest rate hike of 125 basis points, lifting borrowing costs to their highest in a decade
    • Bloomberg Economics expects policy makers to maintain the tightening pace from previous meetings
  • Indonesia’s central bank adopted a more hawkish tone, signaling it’s ready to strike early to temper volatility in the rupiah and bond yields as global markets sell off in anticipation of U.S. rate hikes
    • Hong Kong will be forced to raise borrowing costs when the Fed starts hiking
  • China’s government spending rose at the slowest pace in nearly two decades last year, suggesting limited fiscal support for an economy that’s lost momentum sharply in recent months
    • Bloomberg Economics says a shift in China’s regulatory stance on industry could cushion the growth slowdown this year
  • The European Central Bank has no need to fundamentally change its assessment of the inflation outlook or accelerate policy tightening, Lithuanian Central Bank Governor Gediminas Simkus said
    • Simkus also warned that Europe’s economy would suffer a significant blow if tensions escalate further between Russia and Ukraine

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