On the left, the four lines are the historical policy rates from G4 central banks (the U.S., euro area, UK and Japan). In the case of the UK, Japan and euro area, policy rates have remained low for much of the post-global financial crisis era. The U.S. did begin its interest rate hiking cycle in 2017 but this was interrupted by the U.S.-China trade tension and then the COVID-19 pandemic.

On the right, the four lines show market expectation of where policy rates would be in coming years. Investors are reflecting a more hawkish sentiment with the U.S. Federal Reserve and the Bank of England, with policy rate hikes in 2022. The European Central Bank and the Bank of Japan are still some way off from any meaningful tightening.