When the U.S. Federal Reserve first mentioned in 2013 the prospect of a cutback in its bond buying program, markets had a âtaper tantrum.â Many emerging markets saw large increases in volatility, even though outflows from their domestic markets were small and short-lived. Now the Fed has ended its bond buying and is looking ahead to rate hikes, and portfolio flows continue to arrive at the shores of emerging market economies. So everythingâs fine, right? Not quite.
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