Fed Easing and Emerging Markets

With a Fed cut now looking more likely in September, the implications for emerging market assets are significant.

This recent Working Paper from the National Bureau of Economic Research uses our ICRG geopolitical risk data in part to isolate the determinants of emerging markets performance during five Fed monetary tightening and easing cycles from 2004 – 2023

Obviously, the determinants differ during tightening versus easing cycles, and institutions matter more during difficult times. However, the study found that a current account balance, the country’s international reserves, and inflation are all important determinants of emerging market resilience.

(https://lnkd.in/edMB-3HQ)

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