Joseph Little, chief global strategist at HSBC Global Asset Management, has revised his view on inflation in the US and warned of a rate shock negatively impacting emerging markets.
Little said the group had previously highlighted faster inflation as a key risk, which came into fruition in the first half of this year. As a result, heightened inflation has become a stronger risk as well as a rate shock. He said such a shock would "require a further repricing of risk across asset classes, which makes emerging markets vulnerable to capital market outflows". However, he added: "Large-scale revisions to the market's view of inflation are not every day events. "The combination of a significant repricing of US rates having just occurred, plus the sustained and low in...
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