Will the Fed’s “exit” stifle the global recovery?

Since May this year, when US bond yields started to rise, market participants have been concerned about the implications for the global recovery of the Fed scaling back its policy support. In our view, these concerns are overdone. Monetary policy in advanced economies is likely to remain exceptionally loose for at least three more years. And when it is eventually tightened, this will be a further sign that the world economy is, finally, getting back on its feet.