US Treasury (10 Yr Generic)

How Are Fed’s Rate Hikes Impacting EM?

FX & Rates
189 Views, 12 May 2022 22:19
EXECUTIVE SUMMARY
  • Notwithstanding the economic uncertainties, with the Fed’s path better defined now than a few weeks ago, I expect the volatility of rates to peak in the coming weeks.
  • Uncertainty around the Fed's rate hikes has been spilling over to the monetary policy paths of EM countries even though many of them have been raising rates since last year.
  • If the US rates volatility falls as I expect, then it will be supportive of the short ends of EM rate curves in Latin American and Central European countries.
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Gautam Jain, PhD, CFA
Fixed Income and Currency Strategist
FX & RatesMacroeconomics

Gautam Jain has over 25 years of experience covering global emerging fixed income and currency markets, both as a strate... 

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