More QE and policy divergence on the cards

Two themes are likely to dominate global monetary policy over the next couple of years. First, policy in advanced economies in aggregate looks set to remain ultra-loose as the ECB and BoJ persist with QE. And second, the US Fed is likely to raise rates more rapidly than anticipated by the markets. The resulting policy divergence, which will also be larger than is widely expected, will continue to have a major impact on financial markets.