Central banks have put in place ultra-accommodative monetary policies to support economies during the Covid crisis. The strong recovery taking shape in developed economies should allow a gradual reduction in monetary support. As a strategic element of global financing conditions, the Fed’s monetary policy normalisation is gaining attention.
In developed economies, the rebound in economic activity should allow central banks, first, to gradually reduce purchasing programs and, second, to raise rates. The Bank of England and the Bank of Canada have already made “tapering” announcements. We expect the Fed to follow suit.