BOTTOM LINE
Emerging markets are better positioned than in 2013’s taper tantrum
The near-term outlook for global growth has not been this positive for many years. The apparent success of large-scale vaccination programmes, where these have been implemented, and further significant fiscal packages have prompted economists to raise their global growth forecasts for the next two years.
Bond yields worldwide have also been trending higher, but at a rate that has made some investors uncomfortable. This is because the recovery has to a meaningful degree been driven by lower discount rates and aggressive fiscal policy. The US government alone has spent more than $2.6-trillion on fiscal stimulus packages and the US Federal Reserve has propped up bond markets to keep borrowing costs low through its gargantuan quantitative easing (QE) programme...
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