Role-reversal in monetary policy in 2022: crisis support, stimulus and spending replaced by recovery, repair and reduced fiscal stimulus.
Interest rates have been historically low for more than a decade, dampened by the flood of monetary stimulus introduced in the wake of the global financial crisis. In 2022 we expect this to change. As we move towards economic recovery from the Covid-19 pandemic, the Omicron variant reminds us that this path will not be straightforward. Next year will be marked by a role-reversal in monetary policy: crisis support, stimulus and spending replaced by recovery, repair, reduced fiscal stimulus and a return towards “normal”. Political compromise will be key, not least in the US, as governments tackle the transition. As the support for asset prices is withdrawn, active management – unearthing companies with the enduring qualities that will help them navigate volatility – will be essential to success in 2022. Click to read more
