Should emerging markets be worried? On the one hand, an inverted yield curve is no big deal – or even good news – for developing countries. It’s a strong sign from bond traders to the Federal Reserve that its monetary policy is too tight. During the last period of inversion, a yearlong stretch starting in June 2006, emerging markets’ high-yield bond spreads hardly moved. Sure, the Fed has stepped back from rate hikes, but generosity from China, the elephant among emerging markets, has been another major catalyst.

Source: Washington Post March 24, 2019 22:52 UTC