Global Data Pod Research Rap: Goldilocks and the three positive shocks – can it last for EM?

Nora Szentivanyi is joined by Katherine Marney to discuss an improved macro landscape for EM and what it means for growth, capital flows and monetary policy. The fading of key near-term headwinds has led to a strong start for EM capital flows, and we believe these sources of support, including China’s re-opening, disinflation, and reduced near-term recession risks can last a while. Prospects of a late 2Q Fed pause, weaker USD and better global growth should open up space for EM central banks to ease monetary policy this year. Sustained strength in the US labor market poses a risk to this view. But provided inflation eases as we expect, and barring a re-pricing of the US dollar, we think the macro backdrop can remain supportive for EM.    Speakers Nora Szentivanyi, Economic Research Katherine Marney, Emerging Markets Economic and Policy Research   This podcast was recorded on 7 February 2023. This communication is provided for information purposes only. Institutional clients can view the related report https://www.jpmm.com/research/content/GPS-4325660-0.pdf, https://www.jpmm.com/research/content/GPS-4296890-0, https://www.jpmm.com/research/content/GPS-4316594-0, https://www.jpmm.com/research/content/GPS-4321526-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.