Lessons from the latest EM rate decisions

The raft of EM central bank decisions over the last couple of weeks suggests that the door has largely closed on further rate cuts and that the balance will shift (slightly) towards hikes over the coming months. But this has more to do with domestic developments than the environment of rising US Treasury yields. And given weak recoveries and low inflation across large parts of the emerging world, we think that monetary conditions will be looser than most currently expect.