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(Bloomberg) — Federal Reserve Chair Jerome Powell is likely to emphasize a dovish message to Congress in his first testimony since Democrats took control of the Senate and White House.

The U.S. central bank chief, due to speak this week just as lawmakers weigh President Joe Biden’s plan for $1.9 trillion in additional pandemic aid, will probably echo recent remarks that the Fed is fully committed to supporting the economy, with the labor market far from its full employment goal and inflation below its 2% target.

On Tuesday at the Senate Banking Committee and the next day at the House Financial Services panel, Powell can expect pressure to endorse Democrats’ proposal to go big with more taxpayer support. Republicans will probably focus on the dangers of overheating — a view shared by some Democrats, including former Treasury Secretary Lawrence Summers.

While the ongoing distribution of vaccines and pent-up demand from consumers could result in a strong recovery by the second half, Fed leaders have highlighted that nearly 10 million jobs have been lost since the start of the pandemic. That shortfall will weigh on prices as well.

Powell may try to avoid comment on specific elements of the Biden plan, sticking to his oft-use refrain that he’ll stay in his lane when it comes to prescribing how elected officials spend public money. Questions may also follow about financial stability, including elevated stock prices and wild trading in GameStop Corp.

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What Bloomberg Economics Says:

“Powell is likely to echo prior remarks stressing that now is not the time to talk about the exit. Instead, he will emphasize the Fed’s heightened sensitivity to the uneven distribution of economic outcomes over the past year, particularly the pronounced negative impact on lower income and minority households.”

–Carl Riccadonna, Yelena Shulyatyeva, Andrew Husby and Eliza Winger. For full preview, click here

Elsewhere, European Central Bank President Christine Lagarde and Bank of Canada Governor Tiff Macklem are also set to speak, and central banks in Israel, South Korea and New Zealand set rates.

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

U.S.

U.S. economic data this week will include figures on housing and manufacturing — two sectors that have generated lift for the recovery. The government is forecast to report an increase in January new-home sales and a ninth-straight advance in orders for durable goods. Investors will also be watching for weekly jobless claims.

The U.S. House of Representatives plans to hold its first floor vote on Biden’s stimulus package, with the goal of final passage before March 14.

For more, read Bloomberg Economics’ full Week Ahead for the U.S.

Europe, Middle East, Africa

Britain’s stuck-at-home citizens and its mothballed businesses are eagerly awaiting Prime Minister Boris Johnson’s planned roadmap to ease the country out of lockdown, scheduled for Monday. The implications for jobs, companies and the Bank of England’s future policy action could be significant.

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U.K. labor market data will also reveal the latest damage inflicted by the pandemic, even as the government’s furlough program helps limit some of the fallout, while BOE Chief Economist Andy Haldane and Deputy Governor Dave Ramsden are due to speak too.

Elsewhere in the region, ECB President Lagarde will also make public comments, and a key measure of German business confidence is expected to show more optimism about the pace of recovery.

Turning to central banks, Israel is expected to keep its base interest rate at 0.1% on Monday, a day after the world’s most vaccinated economy plans to reopen, offering relief to businesses — and a test of resilience from the pandemic with global implications.

Rwandan rate setters may see room for easing with inflation that’s slowing, and Botswana will probably hold its benchmark, as will Hungary.

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

Asia

South Korea’s export data for the first 20 days of February will be closely watched on Monday for an early pulse check on the health of global trade.

Hong Kong will release its budget on Wednesday, with economists expecting limited spending measures as an extended recession and repeated stimulus over the past year has expanded the government deficit to a record and shrunk the fiscal reserve.

New Zealand’s central bank has a policy decision on Wednesday where the governor will need to acknowledge the economy’s brightening prospects while ensuring markets of ongoing policy support. South Korea meets Thursday and has a similar challenge.

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On Friday, India will release GDP data that’s likely to show the economy just scraped back into growth in the final three months of the year, with economists at this stage expecting a record contraction for the whole of 2020.

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

Latin America

Brazil ends the month with a flurry of reports: the mid-month reading of its benchmark consumer price index, another on the broadest measure of inflation and wholesale prices, unemployment, current account, foreign direct investment and key budget metrics.

Mexico first serves up retail sales, unemployment, bi-weekly inflation figures, and the final report on fourth-quarter GDP, which fine-tunes the preliminary data published last month.

Then, in the week’s main event, the central bank posts the minutes of its Feb. 11 meeting, where policy makers trimmed the key rate to a four-year low of 4% and adopted a data-dependent stance. Lower headline and core inflation expectations have stirred speculation that Banxico may see room for further easing.

Winding up the week, Chile will release unemployment, retail sales and industrial production data, while Colombia posts its urban and national jobs reports.

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

©2021 Bloomberg L.P.

Bloomberg.com

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