As the coronavirus pandemic throttles economies around the globe, central banks are keeping rates low and using quantitative easing policies similar to the Fed's even in some emerging countries.
Why it matters: Policymakers are likely to face a grim choice very soon: whether to continue to support economic growth by keeping rates low and risking a marked increase in inflation, or raise rates to tamp down on inflation and risk exacerbating the coronavirus-driven recession.
The state of play: Since 2019, emerging market central banks have provided more than 5,500 basis points of interest rates cuts, per Bloomberg.
- But in some emerging countries, including India, Mexico and Turkey (three of the largest), inflation already is rising out of central bankers' target ranges.