Meursault

Right after Ben Bernanke’s announcement on its potential exit/scale-down of the bond-buying program, I lead an inspection with a US company. The agent casually asked “so what’s your view on the tapering?”, I did not say anything because, shamefully, I haven’t even read the news yet by then.

So what is FED’s “tapering”? Let’s have a 101 monetary policy review. Gov buys less bonds –> less money in circulation–>borrowing more costly–>interest rate increases–>less stimulated market and decreased financial activity.

Anyway, as our Financial Secretary warned earlier, the interest-rate expectation in the US would gradually affect our real estate market. Combining with the strict cooling measures, declining demand (with mostly end-users and first-time buyers dominating the market) and the tight supply given the very few launches in the primary residential market, market sentiment remains largely gloomy.

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