But baffling Ben sent the markets into a terrible tailspin in May when he talked about the possibility of the Federal Reserve reducing its monthly asset purchases. A great deal of collateral damage was done to emerging market economies and currencies as global investors jerked money away from these higher-risk areas. Then, in mid-September, benign Ben erupted, volcano-like, and said: “Oh, sorry. What we said before has had effects that we don’t like and didn’t expect, [ie an increase in bond yields and consequently mortgage rates] and therefore we are not going to reduce our bond purchases for the moment.
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