The Only Way Is Up

What a rise in us interest rates could mean for the global economy

Over the past three years, concerns have been shifting away from the eurozone peripheral nations, toward the fragility in emerging markets economies.

The reverberations from China’s slowing economy are being felt most acutely in commodities‑producing nations such as Brazil and Russia, whose economies can be viewed as a leveraged bet on China. Arguably the developed world has not benefited a great deal from the emerging markets growth story since capital has fled the developed world to seek opportunities in the emerging markets. As the US now recovers, the money will flow in the other direction, which spells bad news for emerging market economies.

Declining US Bond Yields

Ten-Year and Three-Month US government bond yields have been declining since 1984

Growing Emerging-Market Concerns

Emerging markets' credit default swap (CDS prices are rising while Eurozone CDS prices are stabilizing

Barrie Wilkinson, London-based partner and co-head of Oliver Wyman’s Finance & Risk practice in Europe, Middle East, and Africa. discusses what a rise in US interest rates could mean for the global economy.

The Only Way Is Up