Central banks in no rush for QE exit yet

ECONOMIC OUTLOOK

Neil Williams, chief economist at Hermes Fund Managers, says growth may have returned to many developed economies, but central banks dare not remove the tide of liquidity just yet.

Four years after warning there would be no rush for the exit from abnormally loose monetary policies, our view is not changing. Despite the recent volatility over ‘taper-gate’, and concerns central banks will start withdrawing stimulus this year, the low-for-longer outlook on rates and bond yields has changed very little. Growth is admittedly better, as the ripple effects of loose policy allows the G5 economies – France, Germany, Japan, the United Kingdom, and the United States – to claw their output lost. Middle East tension also offers extra support to relative safe havens, such ...