A tale of two taperings (J.P. Morgan)

August 2013

KEYWORDS: Federal Reserve Board, Quantitative, China, Emerging Markets, index, debt, Russia, Mexico, Asia Pacific, Latin America


George Iwanicki

  • JP Morgan

Most investors will now be familiar with the word “tapering,” which the US Federal Reserve (the Fed) has used to signal a timeline for winding down its quantitative easing (QE) programme and ultimately terminating its monthly bond purchases. However, for emerging market (EM) investors it is a tale of two taperings. The “second tapering” is the move by Chinese policymakers against a segment of non-bank lending, which will have the effect of delaying both the Chinese and, arguably in the context of the broader asset class, the EM growth rebound that we have been hoping for.

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