FED suggests that they it has no interest to raise the inflation within 2021 at least. That suggests that FED believes that the increasing price pressure from exchange rates, interest rates, wages and economic growth will not pose a considerable threat on inflation or even if it poses, FED believes firmly that inflation is under control.
That means emerging markets will have still time to have relax and will feel less pressure while seeking for loans since the market will have low interest rate. However that does not construe that emerging markets long term debts are decreasing or market recovery will be fast. On the contrary, the market recovery speed will depend on inoculation performance of each respective country and how political leaders will tackle the economic in mid and long-term. High inflation is usually associated with lower growth and financial crisis. Once FED emphasizes that it does not project high inflation in coming years primarily lay good opportunities for emerging markets.
Although FED considers and already projects that the headline inflation will increase in coming months, it considers the increase as transitory and not durable. Food, copper, logistic prices have increased due to lack of supply. This emphasizes that FED will take action depending on economic outcomes instead of acting preemptively based on projections.
Thus, emphasizes any interest rate increase might appear during 2022. Emerging markets still have some fresh air to breathe before it will get expensive to seek new loans.
