Raising rates isn’t necessarily bad news for asset markets, even Asian stock markets.
The Asian Development Bank appears happy about Bernanke’s move.
“The effect on the Asian economies in a way is going to be positive because it isn’t going to choke growth but it also recognises inflationary pressures,” Rajat Nag, managing director of the Asian Development Bank, said in an interview in Tokyo today.
Nag, who provides strategic and operational direction to the ADB, said the Fed’s move “is not the end of cheap money but it is probably the beginning of the end.” “We think this balance between not chocking off growth and not stoking inflation is a difficult call,” Nag said. “But we are encouraged that the governments including the U.S. and Asia are striking the right balance, so my reaction to this move by the Fed is positive,” he said.