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60 seconds with Rajeev De Mello on the Fed and emerging markets

The pain in emerging markets has been in the preparation for the Federal Reserve's lift-off, according to Rajeev De Mello, but the rate hiking cycle could be positive for the region.

28 Jan 2016

Rajeev De Mello

Rajeev De Mello

Head of Asian Fixed Income

30 Minutes
Unstructured Learning Time

CPD Accredited

Emerging market withdrawals

Looking back over the last 30 years, every time the Fed has moved interest rates, or talked about moving interest rates, investors in emerging markets and Asia have been concerned.

This time around it has been no different.

Ever since May 2013, when Ben Bernanke made his speech about tapering quantitative easing, emerging market assets have moved sideways.

Global investors have withdrawn money and there have been concerns about various countries.

Preparation pain

However, in the past, it has generally been the preparation for the Fed’s lift-off which has caused the most problems for emerging markets and Asia.

Once the Fed has started its cycle, markets have tended to be calmer. And this time we think is no different.