The Federal Reserve: Clearer, But Less Cuddly

FOR the past six weeks financial markets have been in a tizzy about “tapering”—central-bank jargon for the process by which the Federal Reserve plans to slow the pace at which it prints money to buy bonds (“quantitative easing”), from the current clip of $85 billion a month. Since early May fear of the end of ultra-cheap money has driven yields on ten-year Treasury bonds up by over 40%. Emerging-market currencies and bonds have wobbled. Some worry about parallels with 1994, when tighter Fed policy caused global financial turmoil.