Needle shifting slowly towards tighter policy

Policymakers in the world’s major central banks have struck a more hawkish tone in recent weeks, but we expect policy to be tightened only in the US this year. While the ECB may announce plans to taper its asset purchases as soon as September, suggestions that it will end its planned purchases early or raise rates this year look misplaced. Meanwhile, both the Bank of Japan and Bank of England look set to leave policy on hold.