The great exit: central banks line up to taper emergency stimulus

The big three of central banking - the US Federal Reserve, European Central Bank and the Bank of Japan - won't officially pare stimulus for a while.

Here's a look at who is tapering, who may raise interest rates and who might be the last to call time on pandemic-era monetary stimulus.Norges Bank is at the vanguard in terms of signaling a retreat, and said on Thursday it is on track to hike interest rates in the second half of 2021. "Since the Bank has already purchased 70 billion pounds out of the 150 billion pounds in gilts to be purchased by the end of 2021, purchases were already set to naturally slow," Ambrose Crofton, global market strategist at JPMorgan Asset Management, said.The Fed plans to keep borrowing costs near 0 percent and maintain monthly asset purchases worth $120 billion until it sees "substantial further progress" towards full employment and its 2 percent flexible inflation target.

Pictet Wealth senior economist Thomas Costerg expects tapering to start by early 2022 and proceed at a monthly pace of $10 billion. That process would last about a year - "enough to keep expectations for the first rate hike well in the distance", he added.Swedish inflation is approaching the Riksbank's 2 percent target but it has said interest rates would stay at 0 percent for years. However, its 700 billion crowns asset purchase program will wind down this year as planned.

It wants unemployment slashed and inflation within its 2 percent to 3 percent target before shifting tack, and doesn't see either happening until 2024. Economists expect rates to stay on hold until then.

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