SPXV - IMF 2024 Spring Meetings Takeaways: Emerging Market Stars Shine Bright

2024-05-06 09:35:00 ET

Summary

• The IMF upgraded US growth forecasts for 2024 by +0.6% of GDP, and Chinese PMIs are back to expansion.
• There aren’t any bad EM stories right now, with almost all of the typical problem cases in EM making meaningful policy adjustments.
• The Fed is expected to cut interest rates one or two times and long-term interest rates are expected to remain not too far from 4.5%.

The EM debt team recently attended the 2024 IMF Spring Meetings in DC and met with a broad range of official sector policymakers, government officials and market participants.

EM investors and policymakers are enjoying their moment

At the 2024 IMF Spring meeting, most of the concerns over emerging markets ((EM)) from the Fall 2023 meeting – from global rates to specific problematic EMs – had been addressed. The mood at the IMF Spring meetings was notably upbeat, which was a refreshing change from the amount of concern expressed about US fiscal policy and global markets at the Fall meetings in Marrakech. Over those six months, US 10-year yields peaked at 4.99, declined to a low of 3.79 and sold back off to 4.63. It’s been a wild ride, but emerging markets digested the volatility and higher rates remarkably well....

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