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Taper tantrum avoided, but sticky inflation may cause tightening tantrum in 2022

  • Fed reduced asset purchases without “taper tantrum”, but sticky inflation could lead to bigger rate hikes in 2022

  • This provides scope for “tightening tantrum” in 2022, leading to volatility in EM assets; need to differentiate is high

  • Proactive rate hikes, lower stock of foreign investment, and lower current account deficits could insulate select EMs

Taper tantrum avoided, but sticky inflation may cause tightening tantrum in 2022
Patrick Curran
Tellimer Research
22 November 2021
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