Fed normalisation not a game changer

The US Fed’s decision to begin scaling back its balance sheet nearly eight years after it started QE is a major milestone, but global financial conditions should remain highly accommodative for a long time yet. They are probably more influenced by total central bank asset purchases throughout the world, which are likely to slow, but remain positive at least for the next two years. And although the Fed and Bank of England will probably raise policy rates before year-end, short-term rates elsewhere will remain very low for the foreseeable future.