As Janet Yellen's Federal Reserve confirmation hearing approaches, it's important to understand what effect her comments could have on emerging markets, Bessemer Trust CIO Rebecca Patterson said Tuesday.
"When she starts talking, are we going to get a dovish signal, confirming no taper, maybe til March or April next year? That's going to be a good signal, all else equal, for EM equities, I think," she said, referring to the expected reduction of the Fed's $85 billion-a-month asset-purchasing program.
"Or does she say, 'I want to be credible. I don't want people to call me a dove.' And we actually get something more hawkish than expected, in which case you want to hang on to your developed-market equities and just be a little more cautious and selective on EM."
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