That's the topic of the month. There are two impacts on emerging markets from the rate hike: short term and longer term. Short term, it will prompt capital outflows from emerging markets back to developed markets. That process is ongoing and to some extent has happened for much of the year to date.
Secondly, and what is more important, is the medium- to long-term impact. Previously, when the Fed was hiking, emerging markets were at a late-cycle stage, similar to the U.S. today. What characterizes a late cycle is the economy is growing really fast. Everything is accelerating. Corporate balance sheets and fiscal balances are stretched. When the Fed hikes interest rates, it puts pressure on all these fundamentals. Currently, although the U.S. is at the tail end of a nine- to 10-year cycle, EM are only two years into the up cycle. We are not seeing those late-cycle characteristics. We are not seeing balance sheets getting stretched.
My conclusion is that, for the medium to long term, the rate hikes should not have much fundamental impact on emerging market economies and corporates. They are at the early cycle of recovery, and that path will not be easily derailed by rate hikes.