Federal Reserve Could Soon Trigger Another Investor Panic In Asia, 2013-Style

Federal Reserve Could Soon Trigger Another Investor Panic In Asia, 2013-Style

Ben Bernanke testifies during a hearing at the House Financial Services Committee in the Rayburn ... [+] House Office Building on Capitol Hill on March 2, 2011 in Washington, D. C. Suffice to say, Jerome Powell's Federal Reserve doesn't seem to scare Asia the way Ben Bernanke's did back in 2013. Eight years ago, markets had a giant "taper tantrum." Investors went mental over hints then-Governor Bernanke's Fed might reduce asset purchases. Not an interest-rate hike; just a possible throttling back on Lehman-era quantitative-easing policies. Bernanke didn't do it, of course. Perhaps spooked by the specter of crashing the global financial system, the Fed demurred. It wasn't until two years later that his successor Janet Yellen was normalizing rates. Yet now as inflation pressures intensify and economists like Lawrence Summers warn of overheating, Fed tapering is back on the table. Perhaps soon, should upcoming employment data flag wage spikes. Or if supply-chain woes push U. S. consumer prices above the current 5% range. And yet Asia is acting like there's little to fear. "Fast forward eight years and there have been good reasons to think that Asia could happily avoid a rerun of the taper tantrum," says analyst Vincent Tsui