Goldman Sachs Asset Management (GSAM) expects emerging markets to outperform developed markets even if the future is cloudy or bumpy.
There is a risk that rising interest rates will slow global economies, but this is especially true for the United States. If rates rise more quickly than expected, things could be worse still.
GSAM presumes U.S. inflation will rise slowly with higher interest rates from the U.S. Federal Reserve. The consumer will likely be able to handle this, GSAM predicts, with U.S. real wage growth "at its highest since the 1950s, in recent years."
Still, the emerging markets bounce is a promising signal of prolonged outperformance.
Read more at Barron's.