On the one hand, the Federal Reserve is well underway with normalization. It ended its net asset purchases in October 2014, started raising the federal funds rate in December 2015 and has recently started to gradually reduce its balance sheet. Consequently, the federal funds rate has again become the primary tool for signalling the monetary policy stance.
In March the rate’s target range was hiked to 1.5 % to 1.75 %; currently markets expect 3 more rate hikes this year while Fed officials pencil in 2 more. On the other hand, the Eurosystem and the Bank of Japan remain more cautious, keeping their monetary policy stimulus in place.