The timing of this moderation in the pace of purchases is necessarily uncertain, as it depends on the evolution of the economy. While moderating the pace of purchases and the eventual increase in the federal funds rate may well affect capital flows, interest rates and asset prices in EMEs, the overall macroeconomic effects need not be disruptive.
First, tightening will in all likelihood occur in the context of a more firmly established economic recovery in the United States so that any adverse effects on EME financial conditions should be buffered by the beneficial effects of higher external demand.