Frankfurt It seems agreed: 2022 will be the year of the central banks. The US Federal Reserve is signaling several rate hikes for 2022, and the ECB will expire the bond program with the abbreviation PEPP at the end of March next year. But how much of the major turnaround in monetary policy by the Fed in the US and the European Central Bank (ECB) have the markets anticipated?
Prices and returns will not develop according to a predictable plan. But above all react to surprises, to deviations from the forecasts. But it is already clear that the markets will have to adjust to dwindling support from monetary policy, and that has only partially happened so far.
The broad consensus of economists and investment strategists is, roughly summarized: Inflation will persist for a while longer than initially expected, but then ease off. The central banks will tighten the reins as planned, resulting in poor bond performance and only modest total returns on stocks.
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