(Repeats Friday's story with no changes)
* U.S. Federal Reserve expected to raise rates again
* Pace of next Fed rate hikes big question for investors
* First G20 meeting since Trump moved into White House
* Signs of differences over free trade commitments
* Four other rich country central banks to meet
By William Schomberg
LONDON, March 10 After a year that tipped
conventional wisdom on its head, the coming week might suggest a
return to some sort of normality for the global economy - or
instead take investors into a whole new round of uncertainty.
On the face of it, Wednesday's expected interest rate hike
by the Federal Reserve would be a clear sign that the United
States has emerged from the shadow of the global financial
crisis, a decade after it began.
As well as raising rates for the third time since the
crisis, the Fed is expected to signal it will speed up its
so-far tentative approach to weaning the U.S. economy off the
extraordinary support of rock-bottom borrowing costs.
But of course it's not business as usual in the United
States and beyond.
When the world's most powerful finance chiefs gather on
Friday for the first time since Donald Trump became U.S.
president, many of them will be alarmed at Washington's new,
protectionist stance, which it wants other countries to endorse.
A draft communique to be argued over by the G20 has dropped
the commitment to "resist all forms of protectionism". A warning
against protectionism has appeared in Group of 20 communiques
for more than a decade.
A diplomatic smoothing of the differences would be a relief
for investors who are worried about what the Trump
administration really has in store.
But if the final language of the communique suggests the
Trump administration has asserted its views over those of other
governments, it would raise big questions about what will happen
to the open market policies that underpin the global economy.
"The G20 will be scoured for any clues as to exactly how the
U.S. might be looking to pursue what looks like a more
mercantilist agenda on trade policy," Brian Coulton, chief
economist at Fitch Ratings, said.
By the time they meet in the German city of Baden Baden, the
G20 central bankers and finance ministers will know whether
there has been another political earthquake after the Trump and
Brexit upsets, this time in the Netherlands.
Opinion polls have suggested that Dutch nationalist Geert
Wilders' right-wing Freedom Party, which wants to take the
Netherlands out of the European Union and stop Muslim
immigration, has lost its lead to more mainstream opponents.
But polls failed to predict Trump's victory or Brexit last
year and investors are nervous about a Dutch election shock just
weeks before voters in France decide whether to make the
anti-EU, far-right Marine Le Pen their new president.
"It will certainly be a big week," Coulton said.
FED MEETING TOPS BUSY WEEK FOR CENTRAL BANKS
As well as the Fed's meeting, central banks in four other
leading rich economies - Japan, Britain, Switzerland and Norway
- are all due to deliver their latest decisions on Thursday.
None of the them are expected to follow the Fed and tighten
monetary conditions. Instead, they are continuing to try to
steer their economies back to normality, and in the Bank of
England's case, to offset incipient signs that last June's vote
to leave the EU is starting to weigh on consumer spending.
Yet for all the political upheaval of the last nine months,
which began with the British EU referendum, many economies are
enjoying their best growth in years.
Even in the euro zone, confidence is at a six-year high, the
services and manufacturing sectors are growing and unemployment
is at its lowest since 2009, prompting European Central Bank
President Mario Draghi to declare victory over deflation.
Against the backdrop of a world economy that is picking
itself up and strong momentum at home, the question for the U.S.
Federal Reserve is not whether to raise interest rates on
Wednesday but how quickly it should do so again.
Economists at AXA Investment Managers said a sharp upgrade
of the Fed's economic growth projections next week could cause
investors to price in even more U.S. rate hikes than the three
currently expected for 2017.
Fitch's Coulton said investors should get ready for a
different pace of action at the Fed. "We will probably see the
second rate hike in three months. It took eight years to get the
previous pair of hikes," he said.
But James Pomeroy, global economist at HSBC, said he expects
only two Fed rate hikes this year, beginning next week, as core
inflation remains below 2 percent, wages grow slowly and
emerging economies feel the strain of a stronger dollar which
will weigh on global growth.
"Although at this meeting it's all very clear that they are
going to be raising rates, and the jobs data suggests that the
economy is in pretty good health, we think going forward it
becomes harder and harder to go it alone and be the only central
bank raising rates," Pomeroy said.
(Editing by Catherine Evans)