Markets do not see approaching policy regime shifts outside the US

The G-4 central banks are in all-out campaign for regime change: after six-plus years, the Fed and the BoE are gearing up to exit from the rates "zero lower bound", while the ECB and the BoJ are stretching their toolkits to anchor inflation expectations.

The challenges are not equally daunting across the G-4. The hurdles seem higher for the BoJ and ECB, with inflation expectations hovering below 2%. The Fed and the BoE seem comparatively closer to their goals, but disinflation fears linger.

BofA Merrill Lynch notes in a report on Monday:

• Looking at market expectations, we find that investors do not see approaching policy regime shifts outside the US.