Like The Herald Business Journal on Facebook!
The Herald of Everett, Washington
Customer service  |  Subscribe   |   Log in or sign up   |   Advertising information   |   Contact us
Heraldnet.com

The top local business stories in your email

Contact Us:

Josh O'Connor
Publisher
Phone: 425-339-3007
joconnor@heraldnet.com

Maureen Bozlinski
General Sales Manager
Phone: 425-339-3445
Fax: 425-339-3049
mbozlinksi@heraldnet.com

Jim Davis
Editor
Phone: 425-339-3097
jdavis@heraldnet.com

Site address:
1800 41st Street, S-300,
Everett, WA 98203

Mailing address:
P.O. Box 930
Everett, WA 98206

HBJ RSS feeds

What Fed tapering will mean

SHARE: facebook Twitter icon Linkedin icon Google+ icon Email icon |  PRINTER-FRIENDLY  |  COMMENTS
By Reid Kanaley
The Philadelphia Inquirer
Published:
The Federal Reserve acts, the world shakes. Or so it seems. The Fed's decision last week to "taper," or reduce, its effort at economic stimulus, has personal and global implications. Here's how.
•Just as what goes up must come down, "The stimulus program was supposed to boost spending going in, so it's going to reduce spending going out," economist Peter Morici is quoted as saying in this look at tapering's effects posted last week at MarketWatch.com. The resulting hit to the economy as the Fed pumps less money into the financial system likely will mean a rise in interest rates, seen early on in mortgages and, eventually, loans for autos, education, and other big-ticket costs. "On the upside, however, U.S. travelers may get more bang for their buck when they travel overseas next year" as the dollar gains value against foreign currencies, the post says. tinyurl.com/WhatTaperingMeans
How do financial markets around the world view action by the U.S. Fed? In a Reuters video posted here at the Globe & Mail website, Jonathan Garner of Morgan Stanley in Hong Kong says in part that a strengthening dollar could be tough on developing economies -- lowering returns on investments. tinyurl.com/TaperingMarkets
The effect of Fed moves is global, as described in this analysis of the tapering posted at Voxeu.org, a site about economic policy. The post by World Bank economist Poonam Gupta and Berkeley professor Barry Eichengreen goes into detail on why economic turmoil stemming from Fed tapering is a real concern for some countries. tinyurl.com/TaperingEmerging
Forbes.com contributor Bill Conerly insists that Fed tapering will have little effect on the economy because, in his view, the Fed stimulus itself "has had little effect." In any event, he says, "the Fed is not hitting the brakes, just easing up a small amount on the gas pedal." Conerly notes that since the financial crisis, the Fed had launched "quantitative easing" programs three times. "In the interludes, the economy did not plummet," he writes. tinyurl.com/TaperingOpinion
Simple explanations of Fed tapering and what it is supposed to accomplish are here at Thomas Kenny's post on About.com. He says the word tapering "exploded into the financial lexicon on May 22, when U.S. Federal Reserve Chairman Ben Bernanke stated in testimony before Congress the Fed may taper -- or reduce -- the size of the bond-buying program known as quantitative easing." Bernanke's words on the subject were that the Fed might "take a step down in our pace of (bond) purchases." tinyurl.com/TaperingExpectation
Story tags » Economy, Business & Finance

MORE HBJ HEADLINES

CALENDAR

Share your comments: Log in using your HeraldNet account or your Facebook, Twitter or Disqus profile. Comments that violate the rules are subject to removal. Please see our terms of use. Please note that you must verify your email address for your comments to appear.

You are logged in using your HeraldNet ID. Click here to update your profile. | Log out.

Our new comment system is not supported in IE 7. Please upgrade your browser here.

comments powered by Disqus

Market roundup