In some circumstances, rising US policy rates can actually ease financial conditions in emerging market economies (EMEs), a paper published by the Federal Reserve finds.

An increase in US rates stemming from strong growth features substantially less adverse spillovers – and, in some cases, positive spillovers – than rate increases driven from inflationary concerns, researchers find.

Jasper Hoek, Steve Kamin and Emre Yoldas identify the different drivers of US rate changes based on moves in