A decent piece from Neil Irwin of the NYTIMES:
Irwin notes –
“The original taper
tantrum happened in June 2013. It is a cute name for what happened when global
financial markets collectively went berserk over the realization that the Fed
was serious about tapering its program of quantitative easing — or put more
plainly, that the Fed would wind down its injections of money into the
financial system over time.
In effect, the
Fed’s easy money policies led global investors to search for higher-yielding
securities, which they found in many faster-growing emerging markets. Money
gushed into these countries in search of better returns from 2010 until 2013,
driving up prices of assets.
But as the end of
the era of cheap dollars has approached, that hot money has pulled out — and
created volatile spikes in interest rates and damage to those emerging
economies.”