About this work
Federal Reserve easing can attract capital to emerging markets and strengthen their currencies, improving the appeal of local assets. The September 2024 analysis also examines the tradeoffs: currency appreciation can hurt exporters, while dependence on mobile capital creates vulnerability when US monetary policy eventually tightens again. Effects differ across asset classes.
Abstract
Federal Reserve easing can attract capital to emerging markets and strengthen their currencies, improving the appeal of local assets. The September 2024 analysis also examines the tradeoffs: currency appreciation can hurt exporters, while dependence on mobile capital creates vulnerability when US monetary policy eventually tightens again. Effects differ across asset classes.
Cite this work
Jonathan Fortun, Marcello Estevão (2024). Global Macro Views: The Fed Easing and EM Capital Flows. Institute of International Finance.