James Barrineau (Schroders) | Emerging market bonds and currencies sustained serious damage in the 2013 “Taper Tantrum”, but are much better placed this time around. Some financial markets have reacted as if Federal Reserve (Fed) Chair Jay Powell rang the bell for tapering of easy financial conditions at the 16 June policy meeting. Investors have naturally dusted off the playbook from the last episode, the notorious “Taper Tantrum” that began…
David Rees (Schroders) | Financial markets in the emerging world suffered a wobble last month. It followed the belated “blue wave” in the US election which appeared to clear the way for a large fiscal stimulus, and sparked a sell-off in the Treasury market. The bout of volatility harked back to the Taper Tantrum that rocked EM markets in 2013. Fears of a repeat, as the US economy recovers this year, have become a major concern among investors.
Should we be worried by the fact that the Fed is reducing its balance sheet? David Buckle from Fidelity is one of those who think not; moreover, he believes that it won’t have any impact on the financial markets.