Economy Week Ahead: Trade, ECB, Inflation

Wednesday

China’s inflation likely eased further in February. The producer-price index is forecast to increase 8.8% from a year earlier in February, slowing from January’s 9.1% gain, according to economists polled by The Wall Street Journal. Annual consumer price inflation is likely to stay flat as weak food prices offset rising costs for other commodities.

Thursday

The European Central Bank is likely to downgrade its forecast for economic growth and raise its outlook for inflation after Russia’s invasion of Ukraine sent commodity prices soaring, further snarled supply chains and raised the risk of broader economic and geopolitical fallout. The ECB at its policy meeting faces a dilemma as it looks to balance competing risks of overheating consumer prices—inflation is already at a record high—and stagnating economic activity.

U.S. inflation reached a four-decade high in January as strong consumer demand collided with pandemic-related supply disruptions. Price pressure isn’t expected to retreat in February. Economists are forecasting that the consumer-price index moved higher yet again last month as demand remained strong and costs for energy and other commodities climbed further. Thursday’s report will be one of the last major data releases ahead of the Federal Reserve’s March 15-16 policy meeting, where officials are expected to raise interest rates in an effort to tamp down inflation.