EM Fixed Income: No One Said It Would Be Easy

• EM credit spreads are already low, but the possibility of a Fed rate cut is still a key factor in the EM narrative.
• The Fed's interpretation of inflation data is shifting, but there is not enough evidence to suggest a higher for longer regime.
• The trend of central banks allowing currency weakness has impacted EM FX performance, but FX reserves have not seen significant increases due to low commodities prices and a lack of capital inflows.

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