The US is starting to behave like an EM economy in crisis

Emerging market crises typically result from anti-market reforms that undermine confidence, leading to collapsing exchange rates , lower equity prices and rising bond yields. In EM crises, asset prices tend to be positively correlated...they all go down. The recent dynamic in the US, at least before the announcement of the 90-day pause in reciprocal tariffs, began to resemble such a dynamic. EM economies that have recovered do so because they make political and economic reforms that restore confidence after their asset prices have taken a beating. EM cris e s teach us that credibility takes a long time to build and can be destroyed quickly.