Quantitative tightening has not been the main driver of higher bond yields in recent years, but it has contributed. With the process now at or near an end in the US and Canada, the threat that further rises in yields might harm economic activity has eased. Risks remain greater in the UK and euro-zone, where central banks plan to continue reducing bond holdings despite fiscal concerns. But we expect these plans would be reconsidered if financial conditions were to tighten significantly.
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