U.S. Federal Reserve officials will meet this week for the first time since Democrats took control of the Senate earlier this month, which has raised the odds of new President Joe Biden and his congressional allies passing a big pandemic relief package.

At the conclusion of the U.S. central bank’s two-day policy meeting Wednesday, Fed Chair Jerome Powell will give the public a sense of how he and his colleagues evaluate the impact of the fiscal shift on the economic outlook amid rising Treasury yields and a stock market pushing to new record highs.

With yields on 10-year Treasury notes above 1 percent for the first time since the pandemic struck, investors are increasingly speculating that more government spending to aid the economy will allow the Fed to begin tapering its massive bond-buying program as soon as the end of the year. That’s in spite of Powell’s recent insistence that “now is not the time to be talking about exit.”

The government’s first look at official data on fourth-quarter gross domestic product, set to be published Thursday, will show what policymakers are working with. After a record 33.4 percent annualized pace of growth in the third quarter, the economy likely downshifted significantly. Forecasters surveyed by Bloomberg project a 4.2 percent pace of expansion in the final three months of the year.

Consumer spending, which accounts for about two thirds of GDP, is seen to have slowed to just over 2 percent growth — after a third-quarter annualized surge of 41 percent — amid a lack of further government relief and resurgent coronavirus outbreaks toward the end of last year.

Elsewhere in the global economy, the International Monetary Fund (IMF) will this week update its economic outlook, and a slew of policymakers speak at the World Economic Forum’s (WEF) virtual Davos Agenda conference.

Data from France and Spain will likely confirm their economies ended 2020 with another contraction. Germany, which will also publish GDP data, probably escaped that fate, but only just. The European Central Bank expects the eurozone’s economy to shrink in the fourth quarter, putting the region on the verge of its second recession in a year.

Poland, eastern Europe’s biggest economy, will publish full-year GDP figures. Elsewhere in the region, an IMF mission is expected to complete a review of Ukrainian economic policies.

South Korea will release GDP figures Tuesday that are expected to show the economy escaping much of the scarring that has hit other countries during the pandemic.

The Philippines hasn’t fared so well — data Thursday is set to show a 9 percent contraction in 2020 according to Bloomberg estimates. In Japan, a clutch of data at the end of the week will show how the economy was holding up before it entered its renewed state of emergency.

(SD-Agencies)