Interest rates in the US and the euro zone are set to rise twice more in the next 12 months, while stronger growth will also prompt the Bank of Japan to start tightening policy, according to a poll of market experts.
A Reuters poll of 35 bond strategists also showed the Bank of England will probably keep rates on hold at 4.5 per cent over the next year as a pick-up in consumer spending and growth have dampened expectations of a rate cut boost.
Median forecasts showed the US fed funds rate peaking at 5 per cent in the second quarter and then staying put through to the end of March.
"Global rates are in tightening mode. Excess capacity has been reduced as a result of fast growth and the expectation is that global growth will stay strong in the next couple of years," said Trevor Williams at Lloyds TSB in London.
European money markets are currently pricing in around a 50-per cent chance of a 25 basis point ECB rate hike in May, but some strategists said a June move was more likely.
Euro zone growth could be slightly more vulnerable, strategists said, given its dependence on exports and the risk that the US economy could slow by more than expected.
A large number of strategists - 16 out of 33 - still expect a cut in interest rates to 4.25 per cent or below by the end of next March.