However, it is clear that the possibility of surprises on this front has increased. Under a situation of limited, if any, slack in the US economy, a policy of fiscal stimulus as the one under way can lead to an acceleration of price growth, which, combined with its implications for public finances, could give rise to an increase in interest rates above current expectations.
Uncertainty in this respect is of course not limited to the United States. As is well known, a noticeable improvement in economic activity has been observed in other advanced economies, the euro area and Canada among them, that has also aroused concern about the possibility of a faster normalization of monetary policy in these countries.