Perspectives connected to the research.
919 results
Examines how foreign exchange rationing and regulatory access shape digital dollar activity in Bolivia. The paper documents expanding activity and supervisory reporting after the June 2024 policy change, with Argentina and Cambodia as contrasting cases.
Read the workJonathan Fortun examines why portfolio flows to emerging markets reversed in September. Flows fell to a net outflow of $26.3 bn from an $11.4 bn inflow in August, the first outflow since June, as a hawkish Fed pushed up U.S. real yields and the dollar. Equities drove the swing with $19.2 bn of outflows, mostly heavy foreign selling of Korean shares, while debt flows were negative at $7.0 bn once hard currency demand faded and credit spreads widened late in the month. The note concludes that Fed projections of further hikes, a BoJ at its highest rate since 1995 and tightening across advanced economies raise the bar for EM carry in the fourth quarter.
Read the workBloomberg Línea reports that US and Japanese public debt tops US$110,000 per person, using a Visual Capitalist review. Jonathan Fortun of the IIF told the outlet that debt per capita says little about fiscal risk, since it mostly reflects wealth and currency. He said sustainability depends on financing costs against growth, putting Brazil and Colombia in a weaker position than Japan, and he singled out the United States as his main worry.
View detailsJonathan Fortun asks whether fiscal pressure is behind the rise in long Japanese yields and the weakness of the yen. The note finds that the 10 year JGB yield has risen by more than 100 basis points in 2026, even as its premium over swaps has narrowed. Forward rates five to ten years out sit well above the Bank of Japan's estimated neutral range, which points to a higher expected policy path, greater uncertainty, or both. The yen is also weak relative to the U.S. and Japanese yield gap, possibly reflecting fiscal expansion and outward investment by residents. Because average coupons trail current yields, interest costs should keep climbing as debt rolls over.
Read the workBloomberg Línea reports on gasoline prices across Latin America as energy inflation and Middle East tensions keep pressure on fuel costs. Jonathan Fortun of the IIF said the region is entering a harder phase than the first half, with Brent back above US$100 and currencies weakening. He warned Brazil's gasoline could rise about 7% if a tax cut lapses, and estimated Bolivia's fuel support at 6.6% of GDP.
View detailsMarcello Estevão and Jonathan Fortun examine how the AI investment boom may affect the cost of long term capital. Five AI intensive companies raised $157 billion through August 2026, adding $108 billion in ten year equivalents, about one fifth of long end Treasury supply. Bond markets absorbed this duration without lasting borrower specific repricing, but the authors argue that stronger investment can still raise the common real rate. Emerging markets may face costlier dollar financing even as countries able to host AI infrastructure attract capital.
Read the workJonathan Fortun explains that a narrower interest rate gap between Mexico and the United States has made the peso more vulnerable to global volatility by weakening the carry trade. He sees no immediate need for Banxico to raise rates, but says disorderly depreciation or inflation passing through to prices could change that assessment.
View detailsBloomberg Línea Brasil reports that a possible US ban on diesel exports would leave Latin America competing with Europe for scarce cargoes. Jonathan Fortun of the IIF said supply side alternatives are scarce, and that Europe would absorb the price impact while Latin America absorbs the volume. He outlined fiscal, rationing and diplomatic paths, urging countries with US free trade agreements to join the negotiation now.
View details