Emerging-Market Stocks, Currencies Fall After Hawkish Fed Signal
- Fed raises rates, boosts outlook for borrowing costs in 2017
- Brazil’s real and Mexico’s peso tumble to Wednesday’s lows
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Emerging-market stocks and currencies fell after the Federal Reserve forecast a steeper path for borrowing costs in 2017, dimming the outlook for riskier assets.
The slump in developing nations deepened on Wednesday as the U.S. central bank lifted interest rates for the second time since 2006 and said inflation expectations have increased. Traders pushed down the value of those assets even after Chair Janet Yellen said changes in projections were “very modest.”