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Asian markets, beware Fed actions

As monetary tightening gains pace, region must reform for sustainable growth

| China
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Federal Reserve Chair Janet Yellen speaks during a news conference after a two-day Federal Open Market Committee meeting in Washington on March 15.   © Reuters

There is an eerie air of calm in Asian markets. After years of easy money, much of which found its way into Asia, the U.S. Federal Reserve is finally applying the brakes. Investors seem to be cheering the prospects of higher dollar interest rates. Financial markets barely responded when America's central bank tightened policy again on March 15, the second time in four months, and promised more to come this year. Perhaps that is because Asian export data has been more reassuring of late. Or perhaps it is because China has bounced back from its earlier growth stumble. Whatever the reason, few seem to appreciate the risk Fed tightening poses to Asia.

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