If U.S. inflation data beats expectations, the Fed will move closer to considering the biggest rate hike in more than two decades. One of the most important data ahead of the Fed's March meeting will be the consumer price index (CPI) for January, released on Thursday. Federal Reserve Chairman Jerome Powell has hinted at a rate hike at the March meeting. January CPI is expected to rise 7.2% year-on-year, which would be the largest increase since 1982. That could prompt the Fed to consider raising rates by 50 basis points for the first time since 2000, rather than the usual 25 basis points.

Cleveland Fed President Loretta Mester said expecting a faster rate hike would be appropriate because inflation has risen significantly and the labor market is much tighter than in 2015. "Inflation remains at risk to the upside," but the number and pace of rate hikes by the Fed will "depend on how the economy develops," Mester said in a prepared speech at a video seminar hosted by the European Economic and Financial Center. She reiterated her support for a rate hike in March.

A growing number of ECB policymakers have lost faith in the bank's current inflation forecasts, leaving them on track to turn to rate hikes later this year, officials familiar with the matter said. While Chief Economist Philip Lane staunchly defends the ECB's forecasts, insisting that the models he uses are reliable and advanced, several presidents cautioned against relying too heavily on them in a rapidly changing, uncertain environment, Because of the recent price hikes that keep breaking forecasts.

Bank of England chief economist Huw Pill has dashed market expectations that the central bank will soon start selling gilts once interest rates hit 1%. "A rate of 1% is not a trigger point. It's just a consideration," Pill told the Society of Professional Economists on Wednesday. BoE policymakers have already said it will start next month through existing bonds when they mature. The approach to replenishing new debt has reduced holdings of 875 billion pounds ($1.2 trillion) of British government debt. The central bank said in its forward guidance that it would consider "active sales" of government bonds once interest rates hit 1 percent.

Bank of Canada Governor Tiff Macklem said the path of future rate hikes will depend in part on whether businesses increase investment as the economy emerges from the pandemic. Two weeks ago, the Bank of Canada decided to keep interest rates unchanged. In his speech on Wednesday, Macklem pledged to "do it carefully and communicate clearly" when he starts raising borrowing costs. But he also made clear that companies also play a role in determining how smoothly rate hikes will go. "Increased productivity is critical to non-inflationary economic growth and improved living standards," Macklem said in prepared remarks for a speech to the Canadian Chamber of Commerce. "This is more important than ever at a time when inflation is already well above our target."

Intel CEO Pat Gelsinger said the company expects wafer supply to remain tight through at least the end of 2023. Gelsinger made the forecast in a letter released ahead of the company's Feb. 17 investor event day. Gelsinger said the supply situation will only improve in 2025-2030, when Intel and other manufacturers will ramp up their fab output to meet growing demand and the transition to technology. “As we enter the second half of this decade, the number of advanced lithography wafers produced annually is expected to double and continue to grow.” As cars become smarter, "the wafer industry must move away from its extreme dependence on older technologies, move to more modern technologies, and solve supply chain problems through capacity expansion."

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