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EM’s are ready for rate hikes, still it would be gradual – Fed’s Bullard

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Oct 13, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - Fed’s Bullard assured markets today that the emerging market (EM) economies are ready for the liftoff/rate hikes, but maintained that policy tightening would be more gradual in order to safeguard EMs from a potential negative impact.

    Many in the markets, including the International Monetary Fund (IMF) have repeatedly said that a liftoff could rattle the emerging markets, especially those with high dollar denominated external debt.

    Bullard also said a liftoff in October is difficult since it would be difficult to switch gears in just one month after Fed kept rates unchanged.

    Key Quotes

    Continued loose FOMC could create future bubbles, equities have returned to normal valuations

    Hikes will be slow and gradual so won't hurt EM's

    Fed vs market liftoff is still a mismatch
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