However, despite the foreseen measured pace, monetary policy divergence has sparked concerns over possible impacts on other nations, particularly emerging economies. Worry has increased perhaps because central banks find themselves in unchartered waters. Indeed, monetary differences across countries have arisen many times in the past. But less experience with unconventional monetary policy instruments and the intensity of their use make the present situation unique.
In any case, the dangers are hard to assess, including the complexity of timely withdrawal of monetary stimulus without violating central bank mandates, and the risk of unleashing a chain reaction of financial instability.