Emerging Market Outflows Surge in September on Hawkish Fed Stance

Key Facts

Emerging markets experienced capital outflows in September driven by the Federal Reserve's hawkish monetary policy stance. Investing.com reported that these outflows occurred as investors reacted to persistent hawkish signals from the US central bank.

Higher US interest rates increased the attractiveness of the dollar and US yields, prompting a rotation out of riskier emerging market assets. This pressure coincided with mixed economic data, as the US ISM Manufacturing PMI reached 54.5 on October 1, 2026, while business confidence in Mexico stood at 48 on the same date.