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G-20 Officials to Discuss Volatile Markets at Moscow Meeting

Policy makers from Group of 20 nations meeting later this week in Moscow will discuss recent volatility in financial markets, according to a Canadian finance department official.

Volatility in currency and bond markets has been the main development since G-20 finance ministers and central bankers met in April, said the official, who spoke on condition they not be identified. Speculation the Federal Reserve may consider tapering its unprecedented bond-purchase program has been an element of the volatility, the official said.

Global yields surged and equities fell after Federal Chairman Ben S. Bernanke signaled on June 19 the U.S. central bank may start tapering its monthly stimulus program this year. U.S. 10-year yields, which climbed 36 basis points in June, have pared increases this week as that concern has eased.

Bernanke said on July 10 in a question-answer session after a speech in Cambridge, Massachusetts that inflation and unemployment rates show the U.S. economy still requires very accommodative monetary stimulus.

Market volatility prompted International Monetary Fund Managing Director Christine Lagarde to say today that central banks need to find a “subtle” approach to phase out stimulus measures.

Finance chiefs from the 20 largest developed and emerging economies meet in Moscow July 19-20.

To contact the reporter on this story: Theophilos Argitis in Ottawa at targitis@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

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