A realignment of US market and economy?

ON WEDNESDAY, June 19, after the United States Federal Reserve concluded its Federal Open Market Committee (FOMC) meeting, chairman Ben Bernanke said at a press conference that "if the incoming data is broadly consistent with (the FOMC's) forecast, the committee currently anticipates that it would be appropriate to moderate the pace of asset purchases later this year".

It was the second time that markets were jolted by the possibility that the Fed's money printing might soon end - the first being on May 22, when Mr Bernanke spoke of "tapering" the Fed's US$85 billion per month quantitative easing (QE) stimulus.

The aftermath of the June meeting was immediate and savage selling: the Dow Jones Industrial Average promptly collapsed by 354 points or 2.3 per cent to 14,758, sending shock waves around this region the next day…