Despite a partial recovery in the markets on Friday, tumbling stock,
bond and commodity prices around the world over the past month are
demonstrating just how reliant the global economy has become on the
monetary policies of the Federal Reserve.
In the weeks since the Fed’s chairman, Ben S. Bernanke, first indicated
that the central bank might start to pare back its support for the
economy, markets in Asia, Europe and Latin America have fallen even more
sharply than those in the United States, threatening economic growth in
many countries.
While leading market measures in the United States have declined 4
percent over the last month, an index of the world’s stock markets has
slumped more than 6 percent.
“The Fed isn’t just the U.S.'s central bank. It’s the world’s central
bank,” said Mark Frey, the chief strategist at the Cambridge Mercantile
Group.
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