Announcements in May that the Federal Reserve envisaged phasing out quantitative easing reverberated through global financial markets. These announcements triggered a surge in benchmark bond yields that spilled over across asset classes and regions in what market commentary referred to as a sell-off. During this episode, equities in both advanced and emerging market economies registered abrupt and sizeable losses. In addition, investor retrenchment from emerging economies led to steep depreciations of a number of local currencies. The sell-off abated in early July when the Federal Reserve, the ECB and the Bank of England reassured markets that monetary policy would remain accommodative until the domestic recovery was on a solid footing. As the rise in long-term interest rates continued, however, markets effectively precipitated a tightening of financial conditions world wide.[...]