The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Abigail with attitude: The consequences of benign Ben’s eruption

As September draws to a close, I am starting to wonder if I am living in a parallel universe. Ben Bernanke seems to have gone barmy. And I wouldn’t blame him. Saving the financial world from itself has been a Herculean task.

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.”

Most investors were wrongly positioned for Ben’s last pronouncement. This doesn’t say much for the Fed’s communication policy or indeed its credibility. But Ben’s change of heart certainly must have brought relief to many emerging market central bankers as global stock markets soared.

I emailed a bank chief executive after the Fed’s taper turnaround to see what he thought. “The Fed is being very cautious,” the CEO responded. “Too cautious in my opinion.”

The Abigail with Attitude column is despondent about the US authorities’ “no taper tantrum”. Money is too cheap. There is too much debt in the system.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree