Emerging Markets to Weather Slow Fed Taper, Says RockCreek CEO

(Bloomberg) -- Emerging markets may face risks when the Federal Reserve decides to taper its bond purchases, but they will be manageable, according to RockCreek Group Chief Executive Officer Afsaneh Beschloss. 

“The usual course of things is the emerging markets that have a lot of U.S.-denominated debt and do not have a lot of exports that are U.S.-dollar based would be the ones to get into difficulty,” Beschloss said in an interview on Bloomberg TV’s Surveillance Wednesday. “Given the way tapering will happen, which is probably incredibly gradually and not sudden, probably the impact on emerging markets will be something that is slower.”

While markets are focused on what Fed Chairman Jerome Powell may say about a reduction in asset purchases at this week’s Jackson Hole symposium, Beschloss noted she doesn’t expect him to “go there” at the meeting. She anticipates tapering to start some time in November or December.

The conference will be held online because of pandemic protocols, and “a lot of people are disappointed not to be there in person,” said Beschloss, a former treasurer and chief investment officer at the World Bank. Still, she will “watch for” central bankers to hold conversations on economic and market conditions worldwide.

“The third job of the Fed, which is stability of the global economy, the U.S. economy of course, but also the global economy, will not be something that Jay Powell will be forgetting to consider,” said Beschloss, who founded the RockCreek investment firm in 2003.

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