Bernanke’s remarks trumped an International Monetary Fund report earlier this week warning that emerging market economies could weaken further.
Emerging market ETFs and other riskier asset classes have been particularly sensitive to expectations the Fed and other central banks could ease back on monetary stimulus.
“The world’s markets woke up today because Bernanke made a declaration that the world wasn’t expecting,” said Ariovaldo Santos, a broker with H.Commcor in Brazil, in a Reuters article. “The market had been nervous recently because people were unsure about when the tapering was going to happen.”
Full disclosure: Tom Lydon’s clients own EEM.