This week will could bring more clarity or volatility into the end of March with the data on tap for the week. The week will be driven a lot by inflation expectations in the US starting with PCE due out later today, Fed Reserve members speaking Tuesday and Thursday, ADP employment and Non-Farm payrolls are also due out Thursday and Friday respectively. These data points and metrics will be important to look at whether the Fed believes the US market can buck the trend of other major countries or if they have room to pare back their expectations of future rates.
Source: Yahoo Finance
Longer term the Central bank needs to keep the cost of borrowing lower than the growth rate in order to spur investment by companies and spending by consumers. When this occurs you can have a positive growth with declining debt. This worked for the US in the past and Europe and Japan have struggled for not taking this approach sooner, now as these two central banks are starting to take stimulus more seriously, the US is looking to tighten. This break from the rest of the major central banks will create misalignments in the flow of money and spending within regions. The carry trade will become popular again as invest see the higher rates in the US more attractive than the risk of the Eurozone or Japan.
How the US will manage this and the expectations the market has vs the Fed will be a very important part of this, so the numbers coming out over the week should not be overlooked as many will be gearing up for earnings season.