Thu, Jun 20, 2013 10:08 AM EDT 0:57
Ben Bernanke scared stock investors when he said the Federal Reserve may start slowing its economic stimulus program later this year. For years, the Fed's extraordinary intervention in the economy has kept borrowing rates very low. But people fear that once the Fed steps back, rates will inevitably rise. China?s financial system is in the throes of a cash crunch. The interest rates that Chinese banks must pay to borrow money from each other overnight surged to a record high of 13.44 percent. according to official daily rates set by the National Interbank Funding Center in Shanghai. Stock futures have fallen adding to a more than 1 percent drop in U.S. equities just a day before. The losses come after Federal Reserve Chairman Ben Bernanke outlined the start of a wind-down of stimuli that has been instrumental to the market's previous rally.