News

Bloomberg: Fed Taper Fear Stalks World Financial Markets: Cutting Research

Any tapering in the Fed’s $85 billion-a-month asset-purchasing program will hurt economies in Europe and Asia, where the focus remains on loose monetary policy, Stephen L. Jen and Joana Freire of London-based hedge fund SLJ Macro Partners LLP wrote in a June 10 report. This decoupling would particularly strike emerging markets, which previously served as magnets for capital as the Fed kept monetary policy looser than their central banks did.

“The Fed devises policies for the sole benefit of the U.S.,” according to Freire and Jen, a former International Monetary Fund economist who also has worked at the Fed. “Just as it did not show much care about the possible negative side effects of its quantitative easing operations, when the time comes for the Fed to start tapering, it will not likely care about the negative side effects on the rest of the world.”

Read the original article on the ‘Bloomberg’ website.

Posted on the 13/06/2013 at 9:27am by joana.