From Morgan Stanley’s Joachim Fels:Economic conditions and policy legroom have switched places since 2008. Back then, economies were in very poor shape and policy legroom abundant. Since then, economic conditions have improved but policy is significantly more constrained than it was then. Despite higher thresholds to easing, the global central bank can deliver effective easing by taking an unconventional approach to conventional and unconventional policy. For the Fed, this could take the form of a negative interest rate on excess reserves, more support for the mortgage market or through innovations in purchasing assets. Moving further into unconventional space for the ECB could mean conducting a large Fed-style asset purchase programme. Finally, EM economies could rewind some of the recent quantitative tightening, policy rate hikes and fiscal tightening. The risk to this scenario of easing is that policy-makers react later rather than sooner.