, Columnist
5 Central Bank Unknowns That Will Shape Markets in 2022
Pronouncements from the Fed, BOE and ECB reveal a wide disconnect between market expectations and monetary policy.
Where to next?
Source: Bloomberg
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Covid has thrown traditional macroeconomics out of its comfort zone.
Last week’s policy pronouncements from the Federal Reserve, the Bank of England, the Reserve Bank of Australia and even the European Central Bank revealed the latest surprise — a wide disconnect between markets’ rate expectations and central banks’ guidance across major currencies. The real “taper shock” came not with the ending of the biggest concerted monetary expansion in history, but with a “tapering” of market confidence in what the future may look like.