Box 1.1. Taper Talks: What to Expect when the United States Is Tightening

摘要

The U.S. Federal Reserve's communication in late May about a future tapering of asset purchases appears to have been a wake-up call to markets that the exceptionally accommodative U.S. monetary policy could soon reach a turning point. By August, U.S. 10-year yields had risen by more than 80 basis points, and many emerging markets experienced capital outflows, higher bond yields, and lower equity prices, which were partly offset by some exchange rate depreciation (see the main text of the chapter). Bond yields declined modestly after the Federal Reserve recently communicated its decision not yet to begin tapering ol asset purchases, but they still remain above pre-taper-talk levels.