The delayed exit in Emerging Asia is affecting other countries. In particular, the interventions in the foreign exchange markets to prevent Emerging Asian currencies from appreciating are shifting capital flows towards other regions, such as Latin America, and pushing up the exchange rates of currencies there, in a disproportionate manner.
I am confident that we can meet these challenges, not least because I have great confidence in the underlying strengths of the American economy. For its part, the Federal Reserve will make responsible use of all its tools to stabilize financial markets and institutions, to promote the extension of credit to creditworthy borrowers, and to help build a foundation for economic recovery.