Emerging economies facing "sudden stop" of capital flows, JPMorgan warns
Emerging markets could be seeing a dreaded "sudden stop" of capital flows as President Donald Trump's 'America First' policies pump up the U.S. economy and suck money away from poorer countries, investment bank JPMorgan warned on Thursday.
Analysts fear sudden stops in capital flows because they starve economies of the money they need to grow or even just keep going.
JPMorgan's in-house indications show there were $19 billion worth of "net capital outflows" from developing economies not including China in the last quarter, with another $10 billion expected to flee in Q1.
«Put simply, using the widely accepted academic definition, this would signal that EM ex China is on the verge of a sudden stop,» the bank said in research note, adding that the phenomenon was not something «to be taken lightly».
There are some caveats for now.
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