During Janet Yellen's interminable testimony today before Congress, the Federal Reserve's new chairman made it clear that the turmoil in certain emerging markets wouldn't affect the policy decisions of the U.S. central bank. She's right: Monetary policy is hard enough without having to worry about the spillover effects to other countries that should take care of themselves.
The official monetary policy report released earlier today noted that "investors appear to have been differentiating among EMEs based on their economic vulnerabilities." In other words, if you're an official in a country with a declining currency and rising interest rates, stop whining about tapering and think about what you did to bring those things on yourself. Here's the key passage:
