SINGAPORE (Dec 10): Last Monday’s rally turned out to be short-lived, underscoring persistent volatility in equity markets, but the outlook for emerging markets may have just brightened some. 

Of significance, US Federal Reserve chairman Jerome Powell said that the benchmark interest rate is now “just below” the neutral level. This is in stark contrast to his use of the words “a long way from neutral” in early October. 

Although the Fed offered no further hints as to what is the neutral rate or if there even is any change in its policy considerations, investors cheered the language shift to mean a more dovish stance. One last 25-basis point rate hike in December is currently seen as almost a done deal, but expectations for 2019 are being pared back. 

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