Investors in emerging markets always keep a close eye on the Fed. Right now, it is making them nervous.
Jay Powell, the Federal Reserve chair, has insisted that the US central bank regards the recent surge in consumer price inflation as temporary and will not risk stifling the economic recovery by tightening monetary policy too soon.
But the signals are mixed. Hawkish officials on the bank’s Federal Open Market Committee have suggested the Fed should reduce its support to the economy through asset purchases as soon as September and raise interest rates as early as next year.
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