The real yield is now high and attractive in EM, in our view.

Against this backdrop, the rise in bond yields this year is clearly interesting. In fact, EM nominal yield is about 6.80%, which is the same level as when the Fed last had the Fed funds rate at 5.25%, while real yields have pushed to the high end of the range over several years. Note that the real US 5yr Treasury yield (based on the 5yr nominal minus the last 12-month Headline CPI) is negative in real terms.

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