”Benign” vs ”vindictive” reflation for emerging markets: The MUFG Global Markets Podcast

2021-03-19

Markets are increasingly in a quandary between two competing views of reflation themes that have exactly opposite ramifications for the emerging markets asset complex. On the one hand there is the more “benign” reflationary perspective which accentuates higher global growth with inflation remaining in-check, whilst on the other hand, the more “malignant” reflationary perspective surrounds fears of US overheating and sticky inflation. Whilst both narratives have merits, Ehsan Khoman, Head of Emergin...

Markets are increasingly in a quandary between two competing views of reflation themes that have exactly opposite ramifications for the emerging markets asset complex.

On the one hand there is the more “benign” reflationary perspective which accentuates higher global growth with inflation remaining in-check, whilst on the other hand, the more “malignant” reflationary perspective surrounds fears of US overheating and sticky inflation.

Whilst both narratives have merits, Ehsan Khoman, Head of Emerging Markets Research (EMEA), believes that there are convincing reasons to support the more “benign” version, and contextualises this assessment for emerging markets against the backdrop of the latest US Federal Reserve meeting.

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