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Fed’s Powell: Emerging markets likely to cope with normalizing global economy

“The corporate debt situation in (emerging markets) has been worsening, particularly in China, and market reactions to even small surprises can be unpredictable and outsized,” Powell said” writes Andrew Harrer for cnbc.com. However, he cautioned that while the reaction to interest rate rises in the United States had so far been benign in emerging markets, significant risks remained.The influential Fed governor noted that while vulnerabilities in emerging markets have been rising, they remain well below crisis-prone periods in decades past, and that capital flows have been moving in line with fundamentals.The normalization of monetary policy in the United States and other advanced economies should be manageable for emerging markets, Federal Reserve Governor Jerome Powell said on Thursday, although he cautioned on high levels of corporate debt.
 
Source: cnbc.com



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