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Quantitative Tightening Not So Frightening, Even as Stocks Slump

  • Balance sheets set to stay accommodative for years: economists
  • Ultimate impact of higher rates could be rotation in stocks
Bloomberg business news
Jose Vinals, chairman at Standard Chartered Bank, says the Fed is "far from crazy."Daybreak: Europe" (Source: Bloomberg)
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U.S. President Donald Trump is not alone in blaming the Federal Reserve for this week’s tumble in stocks, as many investors attribute the ebbing of easy money for spurring an outbreak of market turmoil.

With Bloomberg Economics declaring October as the month the world’s major central banks together start running down their bond holdings, the withdrawal of liquidity is being blamed in part for the summer sell-off in emerging markets, the highest 10-year U.S. Treasury yield in seven years and the biggest drop in stocks since February.