TSLombard with the note:
With vaccines curbing the potency of COVID-19, policymakers can begin to unwind their fiscal and monetary support programmes–starting with QE. Central banks’ asset purchases have had only modest effects on GDP and inflation, but they are important for financial markets. While the authorities will avoid a new”taper tantrum”, investors should expect more volatile asset prices.
Global policymakers are looking to unwind the massive support programmes they introduced at the start of the pandemic. Fiscal policy–crucial for preventing mass unemployment and a wave of bankruptcies–will tighten automatically as economies return to normal. But central banks will have to plan their own exit more deliberately, starting with the decision about how to end QE.