After the Fed cut interest rates by 50 basis points, Carlos de Sousa, portfolio manager of emerging market debt at Vontobel, said that global financing conditions will continue to ease in the coming months, which will help emerging market central banks continue their easing policies. This will create room for several emerging market central banks to restart or continue the easing cycles they have already begun before the Fed. Lower risk-free rates in developed countries will also reduce the external borrowing costs of emerging market issuers, thereby reducing refinancing risks and improving debt sustainability. The easing cycle will prompt asset allocators to increase their risk exposure to emerging markets, as money market instruments and core developed country interest rates will gradually become less attractive.