Central banks must be traumatised by past experiences of monetary normalisation

The normalisation of monetary policy in the United States in 1999-2000 triggered the stock market crisis; in 2005-2006-2007, the subprime crisis; and financial markets reacted very negatively to the beginning of normalisation in 2013-2014 and in 2018 - early 2019, again in the United States. In Europe, the refusal to implement an expansionary monetary policy after the subprime crisis helped trigger the euro-zone crisis. These painful past experiences of monetary normalisation must now make the Federal Reserve and the ECB hesitate considerably before normalising their monetary policies.