Federal Reserve Chairman Jerome Powell on Tuesday teased key elements of the Fed’s upcoming meeting: A half-point interest rate hike is on the table and the monetary authorities’ updated forecasts are likely to peak rates above the 5.1 percent of their last December projections.

Economic data released since the Fed’s last meeting, held between Jan. 31 and Feb. 1, have consistently surprised to the upside, suggesting that rate hikes of 4.5 percentage points since March 2022 have not yet slowed the economy enough to push back inflation.

“Nothing in the data suggests to me that we have tightened rates too much; in fact, they suggest we still have work to do,” Powell said. “It’s hard to argue that we’ve hardened too much. It means we have to keep pushing.”

How far and how fast Powell and his colleagues are willing to go will depend on a series of key reports between now and the March 21-22 meeting of the Federal Open Market Committee, starting with employment data due this week.

“We have two or three more releases of very important data to analyze before the FOMC meeting,” Powell told the Senate banking panel Tuesday. He will testify before the House Financial Services Committee on Wednesday.

“They’re going to be very important in our assessment of this relatively recent data,” he said, noting that if the “totality” of the data warrants it, the Fed would be prepared to accelerate its pace of rate increases.

SGH Macro Advisors’ Tim Duy said the remarks lay the groundwork for the Fed to keep raising rates to 6% and induce a recession along the way.

“Powell did not open the door to a 50 basis point rate hike without intending to go ahead with that outcome at the March FOMC meeting,” Duy said. “Only surprisingly weak data will prevent that outcome now.”

Here’s what to keep in mind between now and March 21, when policymakers make their rate decision in Washington:

FRIDAY EMPLOYMENT REPORT

The Labor Department’s latest monthly report, released just days after the Fed announced its lowest rate hike in a year, showed a gain of more than half a million jobs in January, though slowing hourly wage growth tempered concerns about the impact on inflation.

Economists estimate 203,000 jobs were added in February, a significant cooling, but they also expect average hourly wage growth to return to the 4.8 percent recorded in December. That’s well above the 3.5 percent Fed policymakers typically point to as consistent with their 2 percent inflation target.

Powell said Tuesday that the labor market needs to relax for inflation to retreat. He also said he doesn’t expect the increase in the unemployment rate over the course of this round of rate hikes to be much larger than the percentage point the Fed estimated in December.

Economists expect the report to show that the unemployment rate, which was 3.4% in January, rose to 3.5% in February.

INFLATION, MARCH 14

The Bureau of Labor Statistics’ Consumer Price Index, the most closely watched gauge of U.S. inflation, is expected to show a slight slowdown in price pressure, with a month-on-month increase of 0.4% in February, up from 0.5% in January.

In any case, this figure is well above the Fed’s target, which calls for an average monthly CPI increase of less than 0.2%, analysts estimate.

RETAIL SALES, MARCH 15

Estimates are still preliminary, but economists expect retail sales, which exceeded expectations by rising 3 percent in January, to fall to a 0.2 percent rise in February. It’s unclear what level of retail sales would be considered good enough for the Fed. Consumer spending accounts for two-thirds of the U.S. economy. Rate hikes are aimed at curbing consumer and business demand and spending.

INFLATION EXPECTATIONS, MARCH 17

In June, an unexpectedly high figure from the University of Michigan on consumers’ long-term inflation expectations helped fuel the first of four consecutive 75 basis point rate hikes, fueling what had begun as a quieter round of tightening to become the most aggressive hike campaign since the ’80s.

The next survey will be released on the Friday before the Fed’s meeting and could again be key. The latest reading showed one-year inflation expectations rose to 4.2% from 3.9% in January, while the five-year inflation outlook remained at the bottom of the narrow 2.9-3.1% band that has prevailed for 18 of the past 19 months.

Powell and his colleagues keep a close eye on this data, along with indications of market-based expectations. If inflation continues, Powell said Tuesday, at some point both individuals and businesses “will come to expect high inflation, and that will make it more self-perpetuating.”