Fed Hawk Down; Emerging Markets to Benefit, but Only Short Term

The resignation of Federal Reserve Bank of Richmond President Jeffrey Lacker highlights a phenomenon that the markets probably have not fully priced in: the shooting down, one by one, of the Fed hawks. Emerging markets stand to benefit from this development over the short term. However, it may hinder, rather than help, their progress over the long haul.

OK, perhaps the statement about the "shooting down" of the hawks is an exaggeration, because Lacker resigned over a leak of confidential information to an analyst. But the leak happened in 2012, he has been investigated for it, and he was set to retire anyway in October. Departing now only adds to speculation that there is a lot of pressure from Republicans to gain control over the Fed....665 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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