FXStreet reports that analysts at Natixis said that if, in late 2021 and in 2022, there is a slowdown in growth and significant disinflation then it will be difficult for the Fed and the ECB to justify tapering.

“The first obstacle to tapering concerns the US in particular: the rising number of COVID-19 cases due to a wave of the Delta variant, which is weakening the economy.”

“Growth at the end of 2021 and in 2022 may be slowed by the likely reduction in fiscal deficits between 2021 and 2022, the fall in real wages in 2021 and commodity supply bottlenecks, which are holding back growth in several sectors.”

“The central banks are forecasting significant disinflation between 2021 and 2022, but it could even be more pronounced, given the absence of a rise in unit labour costs and a change of the sign of the base effect of commodity prices, which, after having risen significantly between 2020 and 2021, will fall (even if only slightly) between 2021 and 2022.”