Stock prices declined, currencies fell and interest rates on sovereign or corporate bonds shot up. For many investors, Bernanke’s comments on May 22 in testimony before the US Congress meant that the easy flows of money that had landed in emerging economies would not only end soon, but worse — would be reversed.
As a result, many financial markets in emerging economies began experiencing some “withdrawal symptoms” even before the Fed had acted.
Press forward. By September, the Fed hadn’t touched its bond-buying programme and suggested instead that it wouldn’t any time soon. Most economists and fund managers by then had figured that the famous tapering would not take place until at least December.