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The word tapering in financial terms is increasingly being used to refer to the reduction of the Federal Reserve's quantitative easing, or bond buying programme.
"Taper talk" started in June 2013 when speculation increased that the Fed would start on a tapered end to QE in 2014. The increase in bond yields had already inflicted heavy losses on bond investors. There were mixed opinions on whether tapering or suspending QE would be good for markets or not.
But by September 2013 the markets were thrown into fresh turmoil when Fed chairman Ben Bernanke seemed to back away from some of the guidance that the Fed gave in June.
In December 2013, however, tapering talk turned to action. On the day of Ben Bernanke's last press conference as chairman of the Federal Reserve the Federal Open Market Committee finally decided it would scale down its $85bn-a-month asset purchase programme. Instead, US monetary authorities would reduce purchases by $10bn to each month so long as the US economy continued to to improve.
Despite initial falls in the currencies of some emerging market nations, by the beginning of 2014 some observers, such as Templeton's Mark Mobius, said they believed the fear that tapering would affect emerging market investment was overblown.