Central banks may have been too hasty

To varying degrees, the Federal Reserve, the Bank of England and the ECB want to exit their highly expansionary monetary policies. Although monetary policies remain stimulatory, one wonders whether the central banks may have acted too hastily. Indeed, 2022 will not be a good year for growth: Due to COVID, still (Omicron variant); Due to the negative effect on domestic demand of both fiscal deficit reduction and a decline in real wages not offset by household dissaving. It may therefore prove premature to withdraw some of the monetary support in the first half of 2022.