TEI - Emerging Markets Are Harmed By Trump Not By The U.S. Federal Reserve
The US Federal Reserve turned ´dovish´last week, somewhat surprisingly. Does that mean that emerging markets ((EM)) will cheer? Won't we have other EM currency crashes in 2019, like in Turkey and Argentina last Summer? The last OECD Economic Outlook (November 2018) wrote recently that 'Argentina and Turkey have been experiencing severe financial turmoil. Rising tensions in these economies, in the context of US monetary policy normalisation and idiosyncratic domestic factors, led to a sudden change in market sentiment towards emerging-market economies and triggered capital outflows.'[1]
EM cyclical fortunes do depend on US monetary policy,