The US Fed is likely to raise interest rates in June and to begin a very gradual process of balance sheet normalisation before the end of the year. But other major central banks are a long way behind. We expect the ECB to change its forward guidance slightly in June but not begin tapering its asset purchases until next year, and the Bank of England is likely to leave its policy settings unchanged until mid-2018. By the second half of 2018, the Bank of Japan will probably be the only major central bank still undertaking asset purchases.
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