As was widely anticipated, Jerome Powell, the new chairman of the US Federal Reserve, notched up the first interest rate rise on his monetary tightening belt. The increase is expected to be the first of four this year. Judging by the sanguine reaction of the MSCI Emerging Markets Index, emerging market equity investors are none too worried… and here’s for why. If historic precedent is anything to go by, the asset class has outperformed its developed market peer group in four out of the last five rate-tightening cycles. Rather than obsess over central bank action, investors are looking, correctly so, at the recovery in emerging market earnings growth and company valuations. And so far, there is little evidence to suggest that the emerging market ship will be blown off course anytime soon. Unless President Trump aggressively turns up his rhetoric on protectionism, emerging markets, for now, continue to be driven by controlled inflation on the one hand, and increased corporate profits on the other. The actions of the US Federal Reserve are all part and parcel of the normalisation of growth. The global economy is healing – emerging markets play a significant part in that.