After The Punch Bowl, Can There Still Be Life In The Party?

By Nick Niziolek, Kyle Ruge and Todd Speed

Global asset prices have benefited from the multi-year cycle of global monetary policy stimulus, as the search for yield has encouraged investors to invest capital in all corners of the world. With the Fed continuing its path toward monetary policy normalization and the ECB edging toward tapering, some investors have expressed less confidence in the return potential of an array of assets, including emerging markets.

EMs: “Don’t worry about us so much, we’re good”

One of the defining features of emerging markets is their dynamism, and conditions today are already quite different from the challenges that punished emerging markets in 2013’s Taper Tantrum. In our view, emerging markets are significantly less vulnerable to an external shock than a few years ago, with improved current account balances, private sector deleveraging, lower inflation, and greater policy flexibility overall. Emerging

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