There is no risk of the Federal Reserve or the ECB abruptly exiting their highly expansionary monetary policies

Inflation in the euro zone is expected to fall below the ECB’s target in the summer of 2022, but inflation in the United States is expected to remain significantly above the Federal Reserve’s target. So no one at present sees the ECB abruptly exiting its expansionary monetary policy, but some observers are starting to talk about the Federal Reserve exiting its policy and abruptly correcting its mistake of having kept a highly expansionary monetary policy in place for too long. There would then be a very rapid exit from quantitative easing and rapid interest rate hikes in the United States , leading to a sharp rise in long-term interest rates. This scenario is not credible. Given public and private debt ratios and asset prices, a sharp rise in long-term interest rates would plunge the United States into recession. The credible scenario remains a cautious exit from highly expansionary monetary policy that avoids anything like a bond crisis.