Running out of Reasons to Be Cheerful for Emerging Markets

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Heard on the Street: Friday’s inverted U.S. Treasury yield curve is a bad sign for emerging markets

A dovish Federal Reserve has given emerging markets a lift this year. Now investors are starting to realize the Fed’s change of heart may not be all good news.

Until recently, stocks, bonds and currencies in emerging markets had all risen this year. The MSCI Emerging Markets Index is still up 10%, partially reversing last year’s 17% loss. The Fed helped kick investors into risk-taking mode when it signaled in January that it was done raising interest rates.

 

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