We're in for a Little bit of Volatility in 2019, Says Fitch Ratings' McCormack

The video discusses the growing concern over dollar-denominated debt in emerging markets, especially with the prospect of a stronger dollar. It highlights the expected volatility in capital flows due to rising interest rates in the US and the end of quantitative easing in Europe. The discussion also touches on the implications of the US fiscal deficit on long-term interest rates and the potential impact on emerging markets. Finally, it addresses the global financial tightening trend and its challenges for emerging markets.

What is the primary concern regarding dollar debt in emerging markets?

• The debt has decreased significantly.

• The debt has remained stable.

• The debt has rapidly increased.

• The debt is only a minor issue.

What is expected to cause more volatility in emerging market debt?

• Higher interest rates in the US and the end of quantitative easing in Europe.

• The continuation of quantitative easing in Europe.

• Decreasing interest rates in the US.

• Stable capital flows between advanced economies and emerging markets.

How might fiscal deficits in the US impact global bond markets?

• They will have no impact.

• They will lead to a decrease in treasury supply.

• They will cause a decrease in interest rates.

• They will likely result in higher long-term interest rates.

What is the anticipated effect of global financial tightening on emerging markets?

• Emerging markets are well-prepared for the tightening.

• Emerging markets may face challenges due to their dollar debt.

• Emerging markets will benefit from the tightening.

• Emerging markets will experience no change.

Which central bank is mentioned as potentially tightening policy in the future?

• The Federal Reserve

• The Bank of England

• The European Central Bank

• The Bank of Japan