Any doubts about whether monetary conditions would remain ultra-loose this year have been put to rest by the ECB’s decision to launch “full-blown” QE and the wave of rate cuts implemented during the past few weeks. The further fall in oil prices and weakness of economic activity in several countries means monetary policy will be kept looser for longer than seemed likely a month ago. Nonetheless, we still expect the Fed and BoE to begin hiking rates this year.
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