The traditional view is that the Fed's interest rate increase and the rise in US Treasury yields will hurt emerging markets. In 2013, the Fed revealed that the end of the QE signal triggered a sharp fall in emerging markets. But recent studies have found that if the interest rate rises in the US because of the good economic prospects, it may be beneficial to emerging markets, and the industrial output of emerging markets. capital Inflows and related currency investment returns may increase.

IMF's spillover effect report concluded this year that the spillover effect is determined by the rise in bond yields in developed economies. If it rises because of the good news of the growth prospects of the developed economies, it will have a positive impact. "

The above report divides the impact of the US and the euro area on other parts of the world into three categories: the money shock caused by the central bank's unexpected actions, the real impact (real shock) resulting from the improvement of the economic prospect, and the risk shocks of market participants who are more likely to avoid risks (risk shock). Real impact ratio currency Shocks are more beneficial to emerging markets. That is to say, IMF believes that the real impact has a positive impact.

Research Affiliates's macro research Michele Mazzoleni also found that when the yield of the 10 year treasury bonds rose and the emerging market currencies strengthened, the volatility index VIX, which measures the volatility of US stocks, would decline.

Mazzoleni concluded: "the rise in US interest rates has a positive correlation with the rising returns and risk preferences of emerging market currencies. So the good news for the US and other developed economies is also good for emerging markets.

According to IMF estimates, if the US Treasury bond yields increase by 1 percentage points in the real impact environment, the bond yields of emerging and non advanced countries (EMN) will rise by about 45 basis points, that is, the increase in borrowing costs. Meanwhile, the capital flowing into EMN will also increase by 1 percentage points, which is equivalent to the increase in US Treasury bond yields in three months, and EMN countries account for 0.03% of domestic GDP. One year after the rise in US interest rates, EMN's industrial output usually increased by 2%. However, monetary shocks will inhibit industrial production and capital inflows in such countries.

U.S.A California Investment management company Research Affiliates also made a similar spillover effect analysis, and found that in the face of the real impact, the yield of the 10 year treasury bonds fell by more than 75 basis points, and the emerging market currencies will continue to weaken for several years. If the decline in the US bond yields is less than 75 basis points, the emerging market currencies will be slightly stronger. If the US bond yields increase by 75 basis points or more, the emerging market currencies will go strong.