The end of easing: Are Asian institutional property markets prepared for QE to end?
At seemingly erratic intervals in 2013, the US Federal Reserve Board hinted at “tapering” — the reduction of central bank bond buying, called quantitative easing, or QE — provoking Hong Kong real estate shudders, mayhem in Indonesian capital markets and emergent Asia to hunker down against outflows of capital.
The market message was higher interest rates in the West would draw serious capital out of developing Asia. So what happens when the real thing hits?
Though the Federal Reserve is playing peek-a-boo on plans to cut QE, many observers suspect 2014 will mark the beginnings of reductions in global central bank stimulus. For the five years following the 2008 financial bust and ensuing Great Recession, the world’s central banks have lowered interest rates and purchased bonds, thelatter process known as QE, also sometimes called large-scale asset purchases. With much of the globe’s economy in or near “zero lowe