"There was proper recognition that the movement of monetary policy in major developed countries either way, whether it be tightening or easing, is going to have an impact on emerging economies"
- Joe Hockey, Australian Treasurer
Less than one month was required for Janet Yellen in her new positions as the Fed Chairman to win her first serious battle, supporting the case she is the right person to replace Ben Bernanke.
During her first global forum Yellen won praise for helping smooth emerging-market concerns as the G-20 members pledged to be mindful of potential impact of Fed's tapering on the global economy. India and South African leaders were among countries calling for the Federal Reserve to consider spillovers as it withdraws its stimulus programme. Janet Yellen was very convincing in dealing with the issue of taper fallout, nevertheless, that was impressive how quickly representatives of the Emerging Market countries gave up. The pace of the tapering will continue to depend on the FOMC's view on the fundamental data from the world's number one economy. Moreover, what happens in emerging economies is of only marginal interest to the FOMC members.
Yellen's first testimony offered no surprises as she backed further easing, supporting the already chosen course. This week's most important events come in the last two days, with the release of the U.S. GDP and Yellen's testimony to the Senate banking Committee. This time the first ever lady will shed light on the semi-annual monetary policy report.
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